Preparing Schedule C
Sections Included on Schedule C:
- Page One:
- Top section: You enter certain nonfinancial information here. For example, your name, your principal business or profession, and your accounting method.
- Part I: Income
- Part II: Expenses
- Page 2:
- Part III: Cost of Goods Sold
- Part IV: Information on Your Vehicle
- Part V: Other Expenses
Schedule C-Page 1, Top Section:
Most of the information in this section is self-explanatory. However, there are some line items worth noting.
Line G asks if you materially participated in the operation of the business.
- If you work at least 10 hours per week (500 hours per year), check the Yes box.
Line H asks if you started or acquired the business during the current tax year.
- First year of operations:
- If this is the first year of operations for the business, place a checkmark in the box.
- Resuming the same business started in a prior year:
- If you started this business in the past, then, for some reason, the business remained inactive for one or more years, and now you're going back into it again, place a checkmark in the box.
Preparing Schedule C: Schedule C-Page 1, Part I: Income