1.9 Business Income - Schedule C
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Transcript 1.9 Business Income - Schedule C
Module NJ 1.9
Business Income
Schedule C-EZ
Pub 4012, Tab 2
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NJ Training TY 2008
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Taxpayer Business Income
Schedule C-EZ
Operate a Business (regular and on-going
for purpose of sales and profit)
Or
Sole proprietor
Must Report sales, expenses and net profit
(loss not permitted) on Schedule C-EZ
Out of Scope - If TP does not qualify for
Schedule C-EZ and Schedule C is required
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Definitions
Employee: Employer controls when, where, and
how the employee works (W-2 issued).
Independent Contractor: Performs services for
others.
Self-Employed for Tax Purposes (No W-2 issued)
Note: Household employees (baby sitters,
cleaning help, home health aides etc) income is
taxable to employee – Out Of Scope To Payer
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Schedule C-EZ Requirements
Business expenses of $5,000 or less
Cash method of accounting
No inventory
No net loss from business
Sole proprietor, no employees
Form 4562, Depreciation/Amortization, not
required
No deduction for business use of home
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Schedule C-EZ Information
Only one C-EZ per person on return
“Business Code” Source
Press F-1 Help Button in Tax Wise
or
Refer to 1040 Instruction Booklet
Employer ID Number (EIN)
If TP does not have an EIN, leave space blank. Do not enter SSN
If TP has 1099-Misc, use TaxWise Link from C-EZ line 1
Gross Receipts, to enter 1099 data
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Schedule C-EZ
F1 for List
USE SCRATCH PAD
FOR EXPENSES
F9 to 1099-MISC OR
SCRATCH PAD FOR
INCOME
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Allowable Business Expenses
Repairs and
Advertising
Vehicle expenses
Mileage or actual
expenses – see below
Commissions
Insurance
Interest
Office & rent expense
maintenance
Supplies
Taxes
Travel
Utilities
50% of business
meals/entertainment
Professional fees
Mileage expense calculated by TW must be manually entered on scratch
pad with other expenses – it does not automatically transfer
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Taxes On Self-Employment Income
Social Security and Medicare tax for persons who
work for themselves is 15.3%
Similar to SS tax and Medicare tax withheld from
employees’ wages
Computed on Schedule SE and is automatically
transferred to Form 1040
In TaxWise, entry on line 1 of C-EZ will
automatically generate Schedule SE
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