Traverse City, MI -- (ReleaseWire) -- 02/25/2014 -- It is tough being a sole proprietor and finding the time to run a business effectively. When preparing tax returns, understanding the instructions for using Schedule C can make life even tougher. Frank Ellis, a Traverse City tax expert offers the following advice.
One needs Schedule C to report profit and loss from a business operated as a sole proprietor. The IRS Schedule C instructions include information on different types of businesses such as LLCs, Husband-Wife, Partnership, Joint Venture Status and others.
Business owners should have their Schedule C attached to the 1040 Form and it should be used for
- Statutory employees who had wages and expenses
- Anyone needing to report income (or loss) from a business (or profession) that was run as a sole proprietorship
- Certain joint ventures
- Miscellaneous income (see form 1099-MISC for types of income to report)
Any project one becomes involved in is considered a business if the reason for participating was for income or profit and the business is done regularly and continually.
Statutory employees and small businesses with business expenses of $5,000 or less may file a Schedule C-EZ if they meet the criteria listed on that form.
If ones principal source of income was from farming activities, there would be a need to file Schedule F instead of Schedule C; and the 2014 Schedule C has a few new rules::
- The business standard mileage rate is 55.5 cents per mile
- Gross receipts from credit and debit cards and third party network payments don’t need to be reported separately.
- The heavy highway vehicle use tax has been extended through September 30, 2017. Using certain types of vehicles in business may require paying a higher use tax.
For help filing ones return as a self-employed person, consider doing it online with the TurboTax Home and Business Edition. This will give a step by step guidance and maximized deductions for the largest possible tax refund.
Company: Easy Income Tax Filing Online
Address: 945 East 8th Street Suite A
Traverse City, Michigan 49686
Telephone No.: (231) 922-0938
Email Address: email@example.com