IRS Form Schedule C & Information
PROFIT OR LOSS FROM BUSINESS - Sole Proprietorship
The Schedule C Form
For the sole-proprietors, (those who start a business and control it them selves as well as those who have a single member LLC,) , or the self-employed who own the business solely, but not a corporation or a partnership there is a form that often needs to be filled out for the IRS. They want to know how much money you made or lost with your business.
You have to include this form filled out with your 1040 form and often your Schedule SE (Self-Employment Tax).
Self Employment Tax
As long as you earn $400.00 or more in net profit the IRS wants you to fill out the
Schedule SE form. This is how they collect for Social Security and Medicare tax.
Some of these payments are also deductible on the Form 1040.
There are five sections to fill out
Before you fill in the Income section there is a primary section that asks for the name of the proprietor and the affiliated Social Security Number.
Next comes questions about Principal Business or Profession, including product or service and it's code, Business name and the EIN number, Business Address, whether you participated, if you started or got the business in the previous year, if you made payments that required a 1099 Form, etc.
Part 1 - Income
There are seven lines here and they are about:
- Gross Receipts
- Returns and Allowances
- Subtract line 2 from line 1
- Cost of goods sold
- Gross Profit
- Other Income
- Gross Income
The IRS provides...
If you have a partnership you have to file a Form 1065
The Instructions for the Form are very involved but you can go to the section that you are interested in quite easily. The 1040SC instructional form is down-loadable here.