Q:

What is a Schedule C?

A:

Quick Answer

A Schedule C is a tax form that owners of a small business file along with their 1040. Business owners use the form to report their income, expenditures and losses to the Internal Revenue Service. Independent contractors who work for companies but are not considered employees also use a Schedule C.

Continue Reading

Full Answer

Small business owners and independent contractors keep track of all the expenses they incur throughout the year and list them on this form at tax time to offset their income. The profit or loss amount from the Schedule C is transferred to the individual’s 1040 or 1040A tax form. The profit is added to the amount on the 1040 and losses are subtracted. Business owners and independent contractors who are just starting out and make less than $5,000 with little to no expenses can file a Schedule C –EZ, Net Profit for Business form. These individuals have no losses in their business and no employees. To ease the tax liability at the end of the year, many small business owners and independent contractors pay taxes and Social Security taxes quarterly. The Internal Revenue Service offers a program on their website that allows them to pay electronically or they can mail it in.

Learn more about Taxes
Sources:

Related Questions

Explore