Tips for understanding and completing IRS tax form Schedule C

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Small Bus - Schedule C and Other Tax Forms
Presented by: Jennoa R. Graham, Ph.D.
Friday, April 12, 2013

2.  Income – Money that is received in exchange
for a product, service or contract agreement
 Expense – Money that is paid out in exchange
for a product, service or contract agreement
 Depletion – consumption of a resource faster
than it is replenished (natural resources)
 Self Employment (SE) Tax – tax rate applied
to SE income in addition to federal taxes
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Income – Expenses = Profit (Loss) = Surplus (Deficit)
Profit = Surplus
Loss = Deficit

3.  Estimated Tax – Installment payments made
by independent contractor/ SE owner from
the total income received for services or
product sales
 IRS Form 1040-ES – voucher used to submit
estimated federal income tax installment
payments
 GA Form 500ES - voucher used to submit
estimated Georgia state income tax
installment payments
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4.  Briefly review tools for calculating the dollar
amount of estimated tax
 Review components of Schedule C – Profit
(Loss) From a Business
 Review components of Form 8829 – Expenses
for Business Use of Your Home
 Review components of Schedule SE – Self
Employment Tax
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5.  Federal Installments- Voluntary
 1040-ES Estimated Tax Worksheet (Prepay)
 Tax Season (1040-V, may include penalty fees)
 See www.irs.gov for more information
 State of GA Installments – Voluntary
 500-ES Individual and Fiduciary Estimated Tax
Payment Voucher (Prepay)
 GA-9465 Installment Agreement Request (Tax
Season)
 See www.etax.dor.ga.gov for more information
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Also see “Tax Withholdings
and Estimated Payments”
presentation and documents

6.  Information Section – Basic information about
the business
 Part I – Income and Cost of Goods Sold
 How much money did you make?
 Are sales properly recognized?
 Part II – Expenses (Home use excluded)
 Business use of home and Net Profit (Loss)
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7.  Part I - Quantifies how much of your home is
used for business
 Part II – Calculates the allowance (deduction)
assigned to the quantified use of your home
 Part III – Home Depreciation assigned to
quantified use of your home
 Part IV – Casualty losses and negative
operating expense are not deductible
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*See tax advisor

8.  Short form vs. Long form
 Short = less detail
 Long = more detail
 Church employee or farming income = Long
 Determines if SE tax applies to income
 Calculates amount of tax owed
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9.  What form is used to file GA estimated taxes?
 Form 500ES
 What line on Schedule C would tax
preparation fees be reported?
 Line 17
 What line on Schedule C would home real
estate taxes be reported?
 Line 30
 What is the minimum dollar amount earned
to qualify for self-employment tax?
 $400
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11.  IRS (2013). Tax forms and definitions. Internal
Revenue Code, Retrieved March 5, 2013, from
http://www.irs.gov
 GA Dept of Revenue (2013). Tax forms and
definitions. Office of Tax Policy, Retrieved March
6, 2013, from http://etax.dor.ga.gov
 The American Heritage® Dictionary of the
English Language (2009), Fourth Edition,
Houghton Mifflin Company. Retrieved March 6,
2013, from http://www.thefreedictionary.com
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