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Welcome to our blog, where we will be discussing various topics in accounting, tax, and general business (with the occasional sports rant mixed in). In our first installment we will talk about the most common tax form for business owners, freelancers, and self-employed individuals: Schedule C.
Schedule C is titled “Profit or Loss from Business”. “Business” is as general term that can be used to describe an actual business (with a store front, employees, etc.), freelancers who receive various 1099-MISC documents on their projects, or self-employed individuals that provide a service. Part I of Schedule C calculates your total income for the year, and Part II calculates your total expenses. Some of the common expense items are: employee wages, rent, utilities, insurance, supplies, travel, advertising, professional fees, business mileage, and home office expenses. If you sell a product then Part III of Schedule C will help calculate cost of goods sold for the year based on inventory. If you use a vehicle for business then Part IV of Schedule C will help calculate car & truck expenses for the year based on the standard mileage rate. And finally, if you incurred other expenses that did not fall into a specific category in Part II then can be listed on Part V of Schedule C.
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