![]() ![]() These questions are pretty self-explanatory. You should talk with your tax accountant if you have questions about which method to use. Many independent contractors (who are unincorporated) use the cash method in which earnings and expenses are counted as they happen. In this section, input the kind of accounting method used - either a cash or accrual basis. The address should be the contractor's up-to-date personal address or office space address. This should be left blank if the business is not registered. LLC) need to fill out business name and employer identification number. Only registered incorporated businesses (e.g. Here’s a list of principal activity codes. The code referred to in this line corresponds with the “Principal Business or Professional Activity Code” that the IRS uses to keep track of industries’ growth. In this line, describe the type of work, like “driving services” or “design services.” Let’s walk through the first part of the Schedule C where basic information is entered. Input General and Earnings Information on the Schedule C In this case, the designer may need to fill out two Schedule Cs: one for Lyft income and another for design income. Say, for example, a freelance graphic designer also drives for Lyft. Any contractor who provides different services or goods for different industries, may need to fill out a Schedule C for each business type or industry. However, the IRS isn’t incredibly straightforward on what constitutes a separate business type. Why? Because the IRS requires contractors to fill one out for each business type or professional activity they engage in. How many Schedule C’s do I need to fill out?ĭepending on the sources of 1099 income, contractors may need to fill out multiple Schedule Cs. Self-employed workers and contractors should fill out the Schedule C-EZ if they:Īre not using depreciation or deducting the cost of their home Similar to the 1040-EZ, which is the simplified version of the 1040 form, the Schedule C-EZ is the simplified version of the Schedule C. What is the Schedule C-EZ and could you use it? Let’s go through the steps to take in filling out the Schedule C: Determine How Many Schedule C's You Need Remember, it's important to make accounting a regular business habit to build a financially viable business. Even though Schedule C only has to be filed with annual taxes, it’s good practice to fill one out for quarterly taxes too. Make sure to track these expenses regularly, always saving and organizing receipts. The expenses section of the Schedule C includes common costs like advertising, utilities, rent, car expenses, and insurance. “Gross income” refers to revenue minus direct costs such as wholesale purchases. Under the earnings category, you will see “Gross receipts or sales,” which refers to all the money flowing into the business. A Schedule C form has two general parts: earnings and expenses. ![]() The Schedule C form helps anyone who is self employed calculate the profit (or loss) of the business for annual taxes, which are due on April 15. Here’s the rundown on the Schedule C: Schedule C Form Schedule C form is used to report taxes annually for your yearly income. ![]() Unlike employees, who have taxes withheld out of every paycheck, independent contractors may need to withhold taxes on their own income or use their own funds to make quarterly payments to the IRS.You should talk with your tax accountant when preparing your taxes. If you enjoy the benefits of running your own business, you’re also responsible for your own taxes. ![]()
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