Form 1040 (Schedule C)

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Form 1040 (Schedule C)

A form that one attaches to Form 1040 to report the profit or loss from one's business. An individual files Schedule C if he/she is self-employed in a sole proprietorship or is the only member of a limited liability company. The filer lists all revenues and business expenses on Schedule C. He/she may only be taxed on the profit.
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It is expected that the number of Schedule Cs being filed may increase in part due to the addition of IRC section 761(f) by the Small Business and Work Opportunity Act of 2007.
The' number of problem returns is likely increasing, because the number of Schedule Cs filed increased to more than 20.6 million in 2003, representing an increase of approximately 5% annually from 2001.
Both spouses report their items from the qualified joint venture on separate Schedule Cs. The income remains subject to self-employment tax, but the provision would reduce the burden of filing a partnership tax return.
However, there has been an unusual increase in the number of Schedule Cs being filed.
There are stacks of 1040 forms and Schedule Cs and Schedule Ds.
(Interestingly, the petitioner filed two separate Schedule Cs for the years in issue, one for the equestrian business and one for the interior design business.
When the IRS audited Topping, it segregated the equestrian from the interior design activities and disallowed all of the petitioner's Schedule C horse-related expenses.
She enters canceled checks for Schedule Cs or Es on QuickBooks and puts them in an envelope to send back to the client.
We request copies of clients' checks or bank statements showing the cleared check; detailed explanations on the returns for unusual items (using the tax software comments box); verification of IRA and pension rollovers; a comparison of previous and current 1099s (and an explanation from the client if there is no new one for the year); reconciliation of the gross income on a schedule C with the 1099s; verification the gross security sales figure entered on the tax return is equal to the amounts on brokerage firm 1099s; and answers to every question on the return.
For example, some low-cost programs permit only one or two Schedule Cs and three Schedule E properties.
* The 2008 Schedule C has been revised to add a bullet to Line I of the Form with new language referring to a checkbox: "check the box if: You are a member of a qualified joint venture reporting only rental real estate income not subject to self-employment tax.
At least one software package allows tax accountants to select a "joint" Schedule C to produce two Self-Employment tax schedules.