Jean Wetzler: This is Jean Wetzler. I’m talking with Anna Mayr from the Small Business/Self-Employed Division about schedule C. Anna, what is a schedule C and who needs to file it?
Anna Mayr: Schedule C is the federal tax form filed by the most sold proprietor’s one in their businesses. As you can tell from its title, profiteers lost from business, it’s used to report those income and losses. Many times, schedule C filers are self-employed tax payers that 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’s also a shorter forms schedules C, E, Z net profit for business. This is for self- employed individuals with less complex situations including business expenses of less than $5,000.00 not losses and no employees.
Jean Wetzler: What is the process for filing a schedule C?
Anna Mayr: The process of actually starts when the business does with good record keeping. That will ensure the business owner has everything here she need when it comes time to follow tax return. Schedule C is filed annually as an attachment to form 1040 the individual tax return. The quickest, safest, and most accurate way to file is by using IRS E-file, either or minor through tax professional who is an authorized IRS E-file provider.
Jean Wetzler: So in addition to filing electronically, keeping good records, do you have any other tips for schedule C filers?
Anna Mayr: Start making quarterly estimated payments to cover your income tax and social security self-employment tax. You can make deposits electronically using the electronic federal tax payment system, EFTPS. If you have workers, classify them properly as employees or independent contractors. This is determined by law, not the choice of the worker or the business owner. Be sure it’s deposit your federal employment taxes on time. Put a plan in place to protect your financial and tax records and help you recover quickly in events of a disaster. And steer clear on the views of tax avoidance schemes.
Jean Wetzler: Where can a new business owner get more information?
Anna Mayr: Whether you’ve been in business for a while or just getting started, our website has a wealth of information. Go to IRS.gov/biz for starters. You can browse through the information online, order free tax publication and products or take a small business tax workshop.
Jean Wetzler: Thank you Anna. I’ve been talking with Anna Mayr of the IRS. This is Jean Wetzler.
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