If you work freelance, have a side job, run a small business, or are self-employed, you may need to fill out the IRS Schedule or Schedule C when you file your taxes.
The IRS Schedule C is a tax form for reporting business profits or losses. You fill out Schedule C at tax time and attach or e-file it with Form 1040.
Schedule C is typically for individuals who operate sole proprietorships or one-member LLCs.
A schedule C is not the same as a 1099 form, although you may need an IRS 1099 form (a particular 1099-NEC) to fill out a schedule C. The schedule C is for two types of businesses
- Sole proprietors or;
- Single Member Limited Liability Corporations (LLCs).
Schedule C is not for C corporations or S corporations.
Sole proprietors are unincorporated businesses owned by a single person who is entitled to all profits and responsible for all losses and liabilities. They are often the choice of people who are self-employed, have a side job, are independent contractors, or run a business for themselves.
For tax purposes, the IRS says that you have a business if you are in business continuously and regularly to earn money.
What information is used in a schedule C?
Schedule C is a place to report your business income, as well as all types of expenses you incur to run your business. Your business income minus your business expenses is your net profit (or loss). Net profit is reported as income on the 1040 form.
This is the information you will need:
- The income statement
- The balance sheet of your business for the fiscal year.
- Receipts for your business expenses.
- Inventory records, if you have inventory.
- Mileage and other vehicle records, if you used one for business, leisure.
