Filing Requirements for Schedule C
A business expense must be ordinary and necessary to be listed as a tax deduction on Schedule C. The taxpayer uses Schedule C to calculate the business’s net profit or loss.
To report a business income or loss, page one of IRS Form 1040 and Form 1040NR requests that you attach Schedule C or Schedule C-EZ. You cannot file Schedule C with one of the shorter IRS forms.
Who Should File?
Who should file a Schedule C? You should file a Schedule C if you earn income through self-employment as either a sole proprietor or as a single-member LLC. Don’t use a Schedule C if you report business income and expenses as a C Corporation, S Corporation, or partnership.
Independent contractors report their income on Schedule C (Form 1040), Profit or Loss from Business (Sole Proprietorship). Also file Schedule SE (Form 1040), Self-Employment Tax if net earnings from self-employment are $400 or more.
Schedule C-EZ and Income Thresholds
What is the minimum income to file Schedule C?
There is no minimum income to file the Schedule C. If you meet certain criteria — detailed below — you may be able to file the Schedule C EZ instead. There is a minimum threshold of $400 for paying self-employment tax.
Who does not file a Schedule C? You don’t use a Schedule C if you report business income and expenses as a C Corporation, S Corporation, or partnership.
Additional Information on Schedule C
What is a Schedule C form? Use Schedule C (Form 1040) to report income or loss from a business you operated or a profession you practiced as a sole proprietor. Attach Schedule C to Form 1040, U.S. Individual Income Tax Return. The purpose of Schedule C is to report how much money you made or lost in your business during the tax year.
How Does Schedule C deduction work? Deduct the value of your closing inventory from that total to get your COGS, and enter that amount in Part I to reduce gross income.
What’s on a Schedule C? Filling out Schedule C is necessary to report your profit and loss in your business.
Please note, I have identified and removed duplicate and redundant information while incorporating syntax for structure and clarity.