Income Tax Help for Small Businesses–Schedule C links to the IRS.gov site


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This time of year many folks seem to have questions about where different business expenses go on your annual income taxes, or if the even have to file. Generally, you should get your answers from people in the know–that means directly from the IRS.

Non-official websites and forums are not a good place to get answers. You’ll never know if the person supplying the info actually has a good understanding of the laws or if they just talk a good game if you don’t go to the source.

In that vein, I offer a few official IRS website links that I have found very helpful for filing income taxes as a Sole Proprietorship (info on business structures).

Do I Need to File a Tax Return?
and
Do I Need to Report a small income (or loss) from my sales?

If you had net earnings from self-employment of at least $400 or need to file income taxes for any other reason (like a day job or filing jointly with a spouse) you generally need to file & report all income. For details from the IRS on when you need to file: Do I Need to File a Tax Return?

Recordkeeping Info from the IRS
http://www.irs.gov/businesses/small/article/0,,id=98575,00.html

Sole proprietorships report income and expenses on the Schedule C and submit it with their 1040 to the IRS (and to the state where required–not all states have income taxes, some states have business income taxes when there is no state income taxes for individuals so it’s best to find out what your state rules are from your own state).

Form 1040, Schedule C, PDF file
http://www.irs.gov/pub/irs-pdf/f1040sc.pdf

This is the IRS’s instructions for the Schedule C:

Instructions for the 1040 Schedule C
PDF http://www.irs.gov/pub/irs-pdf/i1040sc.pdf
HTML http://www.irs.gov/instructions/i1040sc/index.html

The instructions for the Schedule C skip a few line numbers leaving you without much needed info–it seems to be because the information is too complex to be included in the document. In my search for more information I have founds answers to many of the instruction’s missing line numbers in the IRS documents further down the page, but before you get to the details of filling out the Schedule C you should understand a bit about the IRS’s Estimated Taxes often referred to as Quarterly Taxes.

Estimated Quarterly Taxes
Some sellers will need to pay Quarterly Estimated Taxes to the IRS and perhaps their state. For the IRS, you will need to expect to owe $1,000 or more at the end of the year to pay quarterly. The “Quarterly Estimated Taxes” link will give you some of the basic info about quarterly taxes & how to determine if you need to pay them.

At the bottom of this page (below the Schedule C help links), there are more IRS help links for filing Quarterly Estimated Taxes if it turns out you need to pay quarterly.

~ Links to the IRS.gov Website ~

Links below open in a new window or tab depending on your browser settings. I list both PDF files and HTML pages when I can:

Links to PDF files allow you to: download the file to your computer to use when you are offline (or online), print out a copy if you like to read it on paper, and they are great for searching for keywords when you are looking for info within a document but don’t want to read it from start to finish.

Links to HTML pages allow you to read the information on the web and often have clickable links throughout & at the end of the page for more information on a topic.

Schedule C Help Links

This list of links has saved me from many headaches, so I share the group of them here with you. Don’t get overwhelmed by all this, these additional links will come in handy if you get stuck on a line on the Schedule C where there are no instructions:

Tax Guide for Small Business, Publication 334
(For Individuals Who Use Schedule C or C-EZ)
PDF http://www.irs.gov/pub/irs-pdf/p334.pdf
HTML http://www.irs.gov/publications/p334

Business Expenses, Publication 535
PDF http://www.irs.gov/pub/irs-pdf/p535.pdf
HTML http://www.irs.gov/publications/p535

Inventories—see Publication 538 (in the “Accounting Methods” section)
PDF http://www.irs.gov/pub/irs-pdf/p538.pdf
HTML http://www.irs.gov/publications/p538

Travel, Entertainment, Gift & Car Expenses, Pub 463
PDF http://www.irs.gov/pub/irs-pdf/p463.pdf
HTML http://www.irs.gov/publications/p463

How To Depreciate Property, Publication 946
PDF http://www.irs.gov/pub/irs-pdf/p946.pdf
HTML http://www.irs.gov/publications/p946

Business Use of Your Home, Publication 587
PDF http://www.irs.gov/pub/irs-pdf/p587.pdf
HTML http://www.irs.gov/publications/p587

Quarterly Estimated Taxes Help Links

(If you expect to owe $1,000 or more to the IRS at the end of the year, you’ll need to pay Quarterly Estimated Taxes.)

Estimated Taxes–article that has the $1,000 number & more basic info:
http://www.irs.gov/businesses/small/article/0,,id=110413,00.html

Filed on Form 1040-ES http://www.irs.gov/pub/irs-pdf/f1040es.pdf (PDF file)

Publication 505 explains using it in more detail:
PDF http://www.irs.gov/pub/irs-pdf/p505.pdf
HTML http://www.irs.gov/publications/p505

Six Tips for People Who Pay Estimated Taxes
http://www.irs.gov/newsroom/article/0,,id=256283,00.html

Need more help? See the middle of this blog post for how to contact the IRS by phone or find an IRS office in your area where you can speak with someone in person:

Tax Deadline &
IRS Help Contact Links

This post is copyrighted–you do not have permission to repost this content elsewhere but you are welcome to link to it if you’d like to share the information.


Visit our Etsy shop: GoTo
Go To Great Panes, Kathryn Maloney ©2012

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