{"id":1169,"date":"2018-02-05T01:00:22","date_gmt":"2018-02-05T06:00:22","guid":{"rendered":"https:\/\/www.etax.com\/blog\/?p=1169"},"modified":"2019-07-09T15:22:17","modified_gmt":"2019-07-09T19:22:17","slug":"profit-loss-business-schedule-c","status":"publish","type":"post","link":"https:\/\/www.etax.com\/blog\/2018\/02\/05\/profit-loss-business-schedule-c\/","title":{"rendered":"Profit and Loss from Business: Schedule C"},"content":{"rendered":"<p class=\"p2\"><span class=\"s2\">If you are paid cash for services performed, you\u2019ll need to complete a Schedule C, Profit and Loss from Business. This form reports earnings and expenses in relation to the work performed. Some common examples include a handyman who works multiple locations, and has expenses for tolls and mileage, or a copywriter who freelances. Schedule C reports all cash income received and expenses that can be documented. You need receipts to verify your expenses or a solid record of mileage and other expenses in order to claim them. Once you\u2019ve completed the form, you\u2019ll have to calculate self-employment tax. <\/span><\/p>\n<h4 class=\"p2\"><span class=\"s2\"><b>Self-Employment Tax<\/b><\/span><\/h4>\n<p class=\"p2\"><span class=\"s2\">Just like employees who are not self-employed, you\u2019ll need to pay taxes on your income. Using Schedule SE, Self-Employment Tax, you can determine the amount you\u2019ll owe in Social Security and Medicare taxes. This only applies if you have over $400 in taxable income. Once you\u2019ve completed Schedule C, you\u2019ll use the total income after deducting expenses to calculate the appropriate amount of self-employment tax.<\/span><\/p>\n<h4 class=\"p2\"><span class=\"s2\"><b>Federal Tax Return<\/b><\/span><\/h4>\n<p class=\"p2\"><span class=\"s2\">Once Schedule C and Schedule SE are completed, you can calculate your federal tax liability. When you complete federal 1040, you\u2019ll determine your balance due for both federal tax and self-employment tax. Be sure to check for credits and deductions that can reduce or eliminate the amount you owe in taxes. Example: The Earned Income Tax Credit is fully refundable and can affect the amount of taxes you\u2019re responsible for, even eliminating your liability entirely and returning some money to your pocket. <\/span><\/p>\n<h4 class=\"p2\"><span class=\"s2\"><b>State Tax Return<\/b><\/span><\/h4>\n<p class=\"p2\"><span class=\"s2\">When you file your state return, you\u2019ll use the adjusted gross income amount listed on your federal 1040. You may owe taxes to your state government once you complete your return, depending on which state you reside in. There aren\u2019t any additional forms to file if you are self-employed and paid in cash, unless you need more documentation in relation to your specific state, other than just federal AGI. <\/span><\/p>\n","protected":false},"excerpt":{"rendered":"<p>If you are paid cash for services performed, you\u2019ll need to complete a Schedule C, Profit and Loss from Business. This form reports earnings and expenses in relation to the work performed. Some common examples include a handyman who works multiple locations, and has expenses for tolls and mileage, or a copywriter who freelances. Schedule [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":1498,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[121],"tags":[345,136],"class_list":["post-1169","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-income","tag-business","tag-self-employment-tax"],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v27.5 - https:\/\/yoast.com\/product\/yoast-seo-wordpress\/ -->\n<title>Profit and Loss from Business: Schedule C - eTax.com\u00ae Blog<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.etax.com\/blog\/2018\/02\/05\/profit-loss-business-schedule-c\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Profit and Loss from Business: Schedule C - eTax.com\u00ae Blog\" \/>\n<meta property=\"og:description\" content=\"If you are paid cash for services performed, you\u2019ll need to complete a Schedule C, Profit and Loss from Business. 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