Schedule C
Definition
IRS Form 1040 Schedule C, used to report profit or loss from a business you operated as a sole proprietor. It calculates your net business income by subtracting business expenses from business revenue. The resulting profit is subject to both income tax and self-employment tax. Common expenses include home office, supplies, travel, insurance, and vehicle costs.
Example
A freelance developer with $95,000 in revenue and $25,000 in business expenses would report $70,000 net profit on Schedule C, owing approximately $9,891 in self-employment tax plus income tax.
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