J.K. Lasser's Guide to Self-Employment, 2nd Edition

CHAPTER 3 Using Schedule C

1. Tax Filing on Schedule C
2. When, Where, and How to File
3. What's Ahead

As a self-employed person without any co-owners, your annual business tax return is not a standalone filing. Instead, your business return is part of your personal income tax return.

Who are Schedule C filers? According to recent IRS statistics, the largest sectors in terms of the number of returns are the professional, scientific, and technical services sectors. Other sectors include construction, merchant wholesalers, retail, and the performing arts. A growing sector is taxis, limousines, Uber, Lyft, and other ride-sharing services. Whatever sector your business activities fall in, there's some basic information you should know about Schedule C.

Tax Filing on Schedule C

Partnerships, multi-owner limited liability companies, and corporations (both C and S) have their own separate tax returns. These returns are filed independently from the returns of their owners. But as a self-employed person, you must file Schedule C, Profit or Loss from Business with your personal income tax return, Form 1040 or 1040-SR. If you have formed a limited liability company but are the only owner (technically called a member), for tax purposes you are a “disregarded entity,” which means you also file Schedule C with your Form 1040 or 1040-SR. (As an LLC, you can opt to be taxed as a corporation, but this isn't the usual thing and is not discussed further here.)

Schedule C paints a picture of your business ...