{"id":47560,"date":"2023-07-25T09:30:00","date_gmt":"2023-07-25T09:30:00","guid":{"rendered":"https:\/\/businessyield.com\/?p=47560"},"modified":"2023-08-31T10:58:43","modified_gmt":"2023-08-31T10:58:43","slug":"what-is-a-schedule-c-tax-form","status":"publish","type":"post","link":"https:\/\/businessyield.com\/accounting\/what-is-a-schedule-c-tax-form\/","title":{"rendered":"What is a Schedule C Tax Form & Who Needs to File?","gt_translate_keys":[{"key":"rendered","format":"text"}]},"content":{"rendered":"

<\/a>What is a Schedule C Form?<\/strong><\/span><\/h2>

A Schedule C form is a tax form used by many sole proprietors, single member LLCs, and small business owners. You file a schedule C tax form along with Form 1040<\/a>, your individual income tax return. In essence, it is a part of your personal tax return.<\/p>

If you’re self-employed, you will probably need to file a Schedule C. Many people with side hustles or 1099 income are required to report the income and expenses of those activities.<\/p>

The Schedule C tax form is where you report that business income and\/or losses incurred from your business activity during a single tax year.<\/p>

<\/a>What Does the Schedule C Form Report?<\/strong><\/span><\/h2>

The Schedule C form will report all your business activities. If you are familiar with accounting, then this would be all activity that is reported in the profit or loss statement. Also known as the income statement.<\/p>

It will detail items such as your business income and profits after business deductible expenses such as insurance costs, car and truck expenses, travel and meals…the list goes on!<\/p>

It will also report any deductible business expenses, like advertising and supplies. There are a lot of other tax-deductible expenses, including home office expenses (utilities, mortgage interest, or rent expense) for those who work at home.<\/p>

<\/a>Who Needs to File a Schedule C?<\/strong><\/span><\/h2>

<\/a>Schedule C is the tax form filed by most sole proprietors and single-member LLCs.<\/strong><\/span><\/h3>

If you formed your business as a sole proprietorship, you have to file a Schedule C. Even if you are a single owner of a business under no formal entity, you’ll file a Schedule C.<\/p>

Keep in mind that whether you have an LLC or not, your default tax status would be considered a disregarded entity. Meaning you need to report activity on a Schedule C.<\/p>

Important Note: An LLC is not a tax election.<\/u><\/strong><\/p>

You may work a regular job, get paid, and receive a W-2 come the new year. But if you have a side-gig that’s continually generating income, odds are that you’ll need to file a Schedule C.<\/p>

Fun Fact: <\/em><\/strong>Over 70% of small businesses file a Schedule C.<\/em><\/p>

Many small businesses will fall under the sole proprietorship entity structure. It’s the most common structure for independent contractors, freelancers, or anyone running a business by themselves. However, C corporations, S corporations, and partnerships do not file a Schedule C.<\/p>

For S Corporations and Partnerships, you will instead get a K-1 form to report on your personal tax return in place of Schedule C.<\/p>

<\/a>How do I file a Schedule C form?<\/strong><\/span><\/h2>

You’ll file a Schedule C (along with your yearly individual income tax return, Form 1040) by using the IRS e-file, either online or through a tax professional that is an authorized IRS e-file provider.<\/p>

<\/a>What business information you’ll need for your Schedule C form:<\/strong><\/span><\/h4>