Schedule C - What expenses go where for your business? (by Mary953)
Mary wrote this blog almost 2 years ago but it is still relevant. Since its tax time I figured I would repost it. Please go back and rec the original blog. Blogs like this should be in a "Best of" series. Schedule C - What expenses go where for your business?
This is the promised list of where to put business expenses by category on a Schedule C for your taxes. Hang on to it. Print it out. This doesn't change. Also, lumping all of your expenses together and sticking them under misc. is possible, but it gives the IRS computer a case of heartburn. Instead of Tums, the IRS computer could call for an auditor to chomp on the offending return. Then you still have to break this stuff out anyway. Comments from other tax preparers are welcomed (the 2006 tax code was the same word length as 10 king james Bibles, For one person to know all of that would be insane) - Oh, and if you are one of the ones that requested this, I hope it helps. You know to use at your own risk (standard disclaimer, all cases different, etc, etc, blah, blah, blah, due diligence, and all that stuff)
First two special situations -
If this is the first year for your business, you have a box to mark on the form (or a question on the automated program to answer) BE SURE YOU MARK THIS. A startup business has more expense than one that is underway. That is taken into consideration.
If you expected a W-2 and got a 1099-MISC with box 7 filed out, you are your own business - surprise! You may have done landscaping, personal training, painting, office work, the list is endless. By paying you this way, your employer didn't have to pay benefits, Social Security, or Medicare. If you are not certain, look at your last pay stub. If there are deductions for Social Security and Medicare, you are on a W-2, Otherwise, you are a contractor.
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