IRS Schedule C

If you're self-employed or run a small business, you'll likely become familiar with IRS Schedule C. Officially titled Profit or Loss From Business, this form lets self-employed individuals and sole proprietors report income, expenses, and calculate net profit or loss for tax purposes.

Who Needs to File Schedule C?

If you're self-employed, running a solo operation, or the sole member of an LLC, Schedule C is your form. Whether you're a freelance graphic designer, Etsy store owner, private tutor, or rideshare driver, you typically need to use Schedule C. Essentially, if your business is not incorporated and you don't file as a partnership or corporation, you're considered a sole proprietor and are required to report income and expenses on Schedule C. It's straightforward: operated a solo business and earned income? Schedule C is where you'll summarize it.

Information Required for IRS Schedule C

To correctly complete your Schedule C, there are several key pieces of information you'll need to have handy:

1. Gross income details: This includes the total amount of revenue your business earned from sales or services, also known as gross receipts.
2. Business expenses: Document all your business-related expenses, like advertising, equipment purchases, travel, insurance premiums, and supplies. Keeping thorough records of expenses can significantly reduce your taxable income.
3. Cost of Goods Sold (COGS): If your business sells products, you'll need to determine your COGS—the direct costs related to producing or purchasing items you sold. This calculation helps in figuring your gross profit.
4. Vehicle expenses: If you use a vehicle for business purposes, you're eligible to deduct related costs. Track mileage, fuel purchases, repairs, maintenance, and keep detailed logs to accurately claim either standard mileage or actual expenses.
5. Office and home-business deductions: If you operate your business from home, you can potentially deduct certain home-office expenses, including utilities or portions of rent, provided you meet IRS criteria.

Careful records and organized documentation make completing IRS Schedule C straightforward and efficient, easing your workload at tax time.

Where to Get Schedule C

Getting a copy of Schedule C is straightforward—simply head over to IRS.gov where you can download a PDF version of the form for free. The IRS website also offers easy access to detailed instructions specific to Schedule C, answering common questions to make filling it out less confusing. Alternatively, many tax software providers include Schedule C in their forms library, making it seamlessly accessible as you prepare your return. For those preferring the old-fashioned way, you can visit a local IRS office or order forms via mail by calling the IRS Forms hotline at 1-800-TAX-FORM (1-800-829-3676).

Schedule C is filed as part of your individual income tax return, Form 1040. This means the standard April 15th deadline applies—unless that date lands on a weekend or holiday, in which case it moves to the next business day. If you need extra time, consider filing for a tax extension, which gives you an additional six months to finalize your documents.

You have two main choices for sending your return to the IRS: filing electronically or sending it via standard mail. Electronic filing is quicker and reduces common errors, while mailing typically results in longer processing times. Most business owners prefer e-filing for convenience and confirmation of receipt.