As many attorneys and CPAs who works with small businesses know firsthand, the IRS Schedule C form is an extremely important document when preparing taxes. A Schedule C is used to calculate the net business income for a sole proprietor or single-member LLC business owner and is basically an addendum to the 1040 form.
According to the Internal Revenue Service:
Schedule C is the federal tax form filed by most sole proprietors; one owner businesses. As you can tell from its title, Profit or Loss from Business, it’s used to report both income and losses. Many times, Schedule C filers are self-employed taxpayers who are just getting their business started. In addition to those who do well at the start, this group can also include new business owners who make very little or no profits, or even lose money. There is also a shorter form, Schedule C-EZ, Net Profit for Business. This is for self-employed individuals with less complex situations including business expenses of less than $5,000, no net losses and no employees.
Here are a few Schedule C tips for our attorneys and CPA clients:
▪ Schedule C is prepared the same way as a 1040: organizing receipts and income stubs for inclusion in the form.
▪ Classify workers correctly, make accurate payments, and keep your clients up on quarterly tax payments.
▪ Necessary documents include a profit and loss statement, asset and vehicle records, travel expense records, and home business records.
▪ File electronically. The IRS recommends it and doing so saves time and money!
Attorneys Corporation Service, Inc. is here to assist our clients during tax season and year round! Check us out online at www.AttorneysCorpService.com or contact one of our experienced customer service professionals at 1 800 462 5487 for more information about our business filing services.