Question

What is important about the SCHEDULE C and how you calculate? How is incorporated into the 1040 and how did it come about as well as anything relevant to explaining it's significance to the FEDERAL TAX CODE. The presentation should be approximately 10 slides.

Answer 1

Slide 1 Schedule C, also known as “Form 1040, Profit and Loss,” is a year-end tax form used to report income or loss from a sole proprietorship or single-member LLC. You must file a schedule C if the primary purpose of your business is to generate revenue/profit and if you're regularly involved in your business's activities

Slide 2 You can use the Schedule C if you have a profit from your business and your expenses are less than $5,000, no inventory, no employees, and you are not using depreciation or deducting the cost of your home. You will need to file Schedule C annually as an attachment to your Form 1040.

Slide 3

you and your spouse can elect to treat an unincorporated business as a qualified joint venture instead of a partnership if you:

• Each materially participate in the business (see Material participation, later, in the instructions for line G),

• Are the only owners of the business, and

• File a joint return for the tax year.

To make this election, divide all items of income, gain, loss, deduction, and credit attributable to the business between you and your spouse based on your interests in the business. Each of you must file a separate Schedule C, C-EZ, or F. Enter your share of the applicable income, deduction or (loss), on the appropriate lines of your separate Schedule C, C-EZ, or F. Each of you also may need to file a separate Schedule SE to pay self-employment tax. If the business was taxed as a partnership before you made the election, the partnership will be treated as terminating at the end of the preceding tax year. For information on how to report the termination of the partnership

Slide

Caclulation under schedule C

1. Income. If you sell products and have an inventory, you will need to complete the Cost of Goods Sold section (Section III of the form) to calculate the cost of products or parts. ...
2. Expenses. In Part II include all of your deductions for business expenses. ...
3. Net Income.