Schedule C; Business Income or Loss

This page includes general information in regards to adding and entering information into the Schedule C. You will also find information on the following:

Gross Income - Including:

- Attaching Form 1099-MISC(s) entered in system,

- Reporting Form 1099-K income.

Expenses:

- Car and Truck Expenses Form 2106

- Depreciation Form 4562

- Business Use of Home Deduction Form 8829.

The following information is not to be used as tax advice. See IRS Schedule C Instructions, or the IRS instructions for any corresponding forms.

Schedule C Listing Page:

If you do not know how to add or get to the Schedule C Profit or Loss from Business Page, please visit our WIKI W-2 Income Page to learn how to Search For and Add forms/pages to your return. Then, once you have added the Schedule C, you can return back to this page for more information.

Once on the Schedule C Main Page, select "Add New" to begin a new Schedule C

OR select "Edit" to enter a previously added Schedule C.

Tip: You can remove a Schedule C by selecting "Delete".

Caution: Delete cannot be undone, once deleted you will lose any information entered into Schedule C.

Schedule C Input Page

Principal Business or Profession:

Include the product or type of service.

Business Code:

See Sub page for list of all Schedule C Activity Codes

Enter the Business Name and/or Employer ID Number (EIN) that belongs to this business. If your business does not have a business name or EIN leave the entry box blank.

Business Address:

To enter a Foreign Business Address click the blue link "To enter a foreign address, click here".

Schedule C Input Page Continued

Select the applicable answer to payments made that required the filing of Form(s) 1099, and if the Form(s) were filed.

Select the Accounting Method: Cash. Accrual, or Other. Note: If Other is selected, you must provide an explanation in the provided explanation field (not shown).

IMPORTANT

All investments are at risk; If there is a loss and some investment is not at risk, you can not use this system.

If you did not materially participate in the operation of this business, you can not use this system.

If you did not "Materially Participate" in this business, you can not use this system.

Schedule C Income

Any unassigned Form 1099-MISC(s) that have been entered will carry over to Schedule C.

You will see the Payer and amount of the Form 1099-Misc(s) that can be added as Gross Receipts to the Schedule C.

Form W-2(s) that have Statutory Employee checked and have been selected to carryover to Schedule C will be available to select.

Important

Form 1099-Misc(s) entered as Rents or Royalties Income will display the Payer Name and no amount. You will receive a error message if this type of income is selected as Gross Receipts on Schedule A.

The system will add the total amounts from the checked Form 1099-Misc(s) to the entry you make as Gross Receipts.

Do not enter the amounts of the Form 1099-Misc(s) or Form W-2 Statutory Employee (with box checked to carry over to Sch C) into Gross Receipts, the system will calculate these for you.

Enter Form 1099-K Income directly in the Schedule C. This can be added to Gross Receipts total or can be entered as Other Income.

Schedule C Expenses

Car and Truck Expenses:

Anytime the Schedule C will have either Car and Truck Expenses Form 2106 or Depreciation of a Vehicle on Form 4562, this question must be selected as "Yes".

After selecting "Yes" for Car and Truck Expenses, or Vehicle Depreciation, enter any remaining information, and select "Save and Continue". The next page you will see is the Asset Manager Page.

Select link below to open page on adding a Vehicle and entering Car and Truck Expenses for Form 2106 and Form 4562.

Car & Truck Expenses (Form 2106/Form 4562)

Depreciation & Amortization:

Check the box to list assets and attach Form 4562 Depreciation and/or Amortization to the Schedule C.

Use the Depreciation Override box or the Amortization Override box when Form 4562 is not required.

IMPORTANT

A error message will generate within the Schedule C when:

The box is checked to list depreciation and an amount in Depreciation Override box.
Car and Truck expenses is answered "Yes" and a amount is entered into the Depreciation Override box.

Remember to allocate any Mortgage Interest being entered. Only enter the amount that can qualify as your business here. Enter the personal amount into the Schedule A, Itemized Deductions (if applicable).

Cost of Goods Sold

Select the method of Cost of Goods Sold:

Lower of Cost or Market.
Other. An explanation must be provided when "Other" is selected.
Not Applicable. When this section is not needed.

Was there any change in determining quantities, costs, or valuations between opening and closing inventory:

You must provide an explanation when answered "Yes".

Enter the information to match Schedule C Part III. The system will carry the total Cost of Goods Sold to Schedule C, Line 4.

Inventory at the beginning of year:

When the beginning inventory of this year is different from last year's closing inventory the IRS requires a explanation of the difference to be attached to the Federal Tax Return.
- - You will need to select to "Include Election Explanations" (found on the Summary Page). Election Explanations are submitted with the eFiled Tax Return. Returns that are paper filed are required to include a handwritten/typed explanation and attach/send it with the return.

See IRS Schedule C Instructions for further information.

How to add an Asset on Schedule C

To add an asset on your Schedule C, you will need to answer accordingly to Question #9.

On Question #13, you will need to check the box that says "Check to List Depreciation"

This will bring you to the Schedule C Profit or Loss from Business Assets page.

Click on the appropriate Asset you need to enter located under "Add a New Asset Entry" and fill out the next page accordingly.

This information is not to used as tax advice, the information provided will not include the tax laws or any specific details about what/who qualifies to take these expenses. Refer to the IRS Schedule C Instructions, or the IRS website for more information.

The information given explains the steps required within the system to include Car and Truck Expenses, Depreciation, Amortization, and the Business Use of Home Deduction (Form 8829).

Schedule C expenses that require only the amount to be entered directly into the box are not included here. Only the expenses that require more information to be included on the Schedule C are shown.

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