KIM: Hello.
My name is Kim from the IRS
here to talk to you about
the most common federal tax form
filed by most
one-owner businesses,
the Schedule C.
Schedule C is the tax form
filed by most sole proprietors.
As you can tell from its title,
"Profit or Loss From Business,"
it´s used to report
both income and losses.
Many times, Schedule C filers
are self-employed taxpayers
who are just getting
their businesses started.
In addition to those
who do well at the start,
this group can also include
new business owners
who make very little
or no profit or even lose money.
There´s also a shorter form,
Schedule C-EZ,
"Net Profit From Business."
You can use the Schedule C-EZ
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.
The quickest, safest,
and most accurate way to file
is by using IRS e-file
either online
or through a tax professional
that is an authorized
IRS e-file provider.
Here are a few tips
for Schedule C filers.
Keep good records.
This will help you complete
your tax forms accurately.
And be sure to have
a plan in place
to back up and protect all those
financial and tax records
in case of a disaster.
Start making quarterly
estimated tax payments
to cover your own income tax
and Social Security
self-employment tax.
You can make deposits
electronically
using the Electronic Federal Tax
Payment System, EFTPS.
Be sure to also deposit
your federal employment taxes
for your employees on time
using EFTPS
and timely file your Form 941,
Employer´s Quarterly
Federal Tax Return.
And if you have workers,
follow the tax law
to classify them properly
as employees
or independent contractors.
If you need assistance
or more information,
the IRS has set up
a very helpful online resource
called the Small Business
and Self-Employed Tax Center.
At this website,
you´ll find useful tips
to help you set up
or run your business,
order free tax publications,
or take a live, small business
tax workshop or webinar.
To get there,
go to IRS.gov/smallbiz.