16 Aug What is a Schedule C and How Do I File One?
If you’re reading this, you’ve probably heard about a form called a Schedule C. Perhaps you’re a realtor or a freelancer and you’ve seen it brought up in forums or tax websites. That said, you keep asking yourself:
“What is a Schedule C?”
In short, a Schedule C is a portion of a form 1040. That said, the form is designed for those who either own their own business or are independent contractors. Usually, those who receive 1099s are required to fill out this form, but business owners who don’t receive 1099s are required to fill one out as well.
Getting no tax documents doesn’t mean you’re exempt from filing taxes.
Instead, the IRS expects you to not only fill out this form, but to keep track of all the proper information. This means that you must keep track of how much money you make, how much your expenses are, etc. Every good independent contractor knows to keep track of this information.
How Do I File a Schedule C?
Filing these forms can often be a much more involved process than other tax forms, considering that the information isn’t already there for you. Online tax software can help with this process, giving you blanks where you must simply put in the right information.
However, it’s easy to file a Schedule C incorrectly.
The IRS isn’t always clear what counts for a business expense and how much of a utility you can claim. You don’t want to overspend on your taxes, but you don’t want to file incorrectly and risk an audit.
For those unfamiliar with how to file a Schedule C, hiring a tax accountant is a worthy investment. At Tax Defense Ohio, we not only resolve tax issues, but we file income taxes as well.