Schedule C; Profit or Loss from Business

This page includes general information in regards to adding and entering information into the Schedule C. You will also find information on the following:

Gross Income - Including: 
- Attaching Form 1099-MISC(s) entered in system, 
- Reporting Form 1099-K income.

- Car and Truck Expenses Form 2106  
- Depreciation Form 4562 
- Business Use of Home Deduction Form 8829.  

The following information is not to be used as tax advice. See IRS Schedule C instructions, or the IRS instructions for any corresponding forms.

Schedule C Listing Page:

Select "Add New" to begin a New Schedule C.

Enter your Schedule C by selecting "Edit".

Remove a Schedule C by selecting "Delete". Caution: Delete can be undone, once deleted you will lose any information entered into Schedule C.

Schedule C Input Page:

Principal Business or Profession:
Include the product or type of service. 

Business Code:
Clicking here will open the Schedule C Business Codes page.
Schedule C Business Codes

Enter the Business Name and/or Employer ID Number (EIN) that belongs to this business. If your business does not have a business name or EIN leave the entry box blank.

Business Address: To enter a Foreign Business Address click the blue link "To enter a foreign address, click here".  

Schedule C Input Page Continued:

Select the applicable answer to payments made that required the filing of Form(s) 1099, and if the Form(s) were filed. 

All investment is at risk; If there is a loss and some investment is not at risk, you can not use this system.  

Select the Accounting Method: Cash. Accrual, or Other. Note: If Other is selected, you must provide an explanation in the provided explanation field (not shown).

IMPORTANT: If you did not materially participate in the operation of this business, you can  not use this system.

If this is the business's first year check this box. 

Schedule C Income

Any unassigned Form 1099-MISC(s) that have been entered will carry over to Schedule C.
You will see the Payer and amount of the Form 1099-Misc(s) that can be added as Gross Receipts to the Schedule C. 

Form W-2(s) that have Statutory Employee checked and have been selected to carryover to Schedule C will be available to select. 

Important: Form 1099-Misc(s) entered as Rents or Royalties Income will display the Payer Name and no amount. You will receive a error message if this type of income is selected as Gross Receipts on Schedule A.

The system will add the total amounts from the checked Form 1099-Misc(s) to the entry you make as Gross Receipts. 
Do not enter the amounts of the Form 1099-Misc(s) or Form W-2 Statutory Employee (with box checked to carry over to Sch C) into Gross Receipts,
The system will calculate these for you.  

Enter Form 1099-K Income directly in the Schedule C. This can be added to Gross Receipts total or can be entered as Other Income.  

Preparer Notes are attached to the eFiled Return. You may use to add specific details on income/expenses, Form 1099-K details, etc,
This is an optional feature and not required.   

Cost of Goods Sold

Select the method of Cost of Goods Sold:
- Lower of Cost or Market.
- Other. An explanation must be provided when "Other" is selected.
- Not Applicable. When this section is not needed.

Was there any change in determining quantities, costs, or valuations between opening and closing inventory: 
-You must provide an explanation when answered "Yes".

Enter the information to match Schedule C Part III. The system will carry the total Cost of Goods Sold to Schedule C, Line 4.  

Schedule C Expenses:

Schedule C expenses that require only the amount to be entered directly into the box are not included here. Only the expenses that require more information to be included on the Schedule C are shown. 
This information is not to used as tax advice, the information provided will not include the tax laws or any specific details about what/who qualifies to take these expenses. Refer to the IRS Schedule C Instructions, or the IRS website for more information.
The information given explains the steps required within the system to include Car and Truck Expenses, Depreciation, Amortization, and the Business Use of Home Deduction (Form 8829).  

Car and Truck Expenses:
Anytime the Schedule C will have either Car and Truck Expenses Form 2106  or Depreciation of a Vehicle on Form 4562, this question must be selected as "Yes". 

After selecting "Yes" for Car and Truck Expenses, or Vehicle Depreciation, enter any remaining information, and select "Save and Continue". The next page you will see is the Asset Manager Page.

This link will take you to page for adding a Vehicle and entering Car and Truck Expenses for Form 2106 and Form 4562.

Depreciation & Amortization:
Check the box to list assets and attach Form 4562 Depreciation and/or Amortization to the Schedule C. 
Use the Depreciation Override box or the Amortization Override box when Form 4562 is not required. 

IMPORTANT: A error message will generate within the Schedule C when:
-The box is checked to list depreciation and an amount in Depreciation Override box.
-Car and Truck expenses is answered "Yes" and a amount is entered into the Depreciation Override box.    

Remember to allocate any Mortgage Interest being entered. Only enter the amount that can qualify as your business here. Enter the personal amount into the Schedule A, Itemized Deductions (if applicable).

Business Use of Home Deduction; Form 8829:

Form 8829 Business Use of Home Deduction is within the Schedule C. This deduction is only supported as an Expense to Schedule C. 

This is located at the end of the Expense section on the Schedule C page. 

Choose the method from the drop-down menu
- Simplified Method
- Simplified Method Detail

- Form 8829

- Enter the Business Use in Square Feet in the first box.
- Enter the Total Home Square Feet in the second box.

Clicking Save and Continue will open Form 8829 (when applicable).

Form 8829: Part I
Click the pencil to enter Gross Income from Trade or Business page, and Allowable Expenses page. 

Gross Income from Trade or Business:
Gross Income may be edited by clicking the pencil. Any business income included in the Gross Income is from a place of business other than the home, you must edit this page. Daycare Business: When part of the home is not used regularly for the daycare business, you edit this page and complete the required section, 

Special Computation for Certain Daycare Facilities:
Enter the percentage use here if the daycare business in home includes areas that are both area used both exclusively and partially. You must include details explaining the calculation used to determine the percentage. 

To determine the total percentage, you must: (See complete text in IRS Form 8829 instructions)
1.) Figure the business percentage of the part of your home used exclusively for business by dividing the area used exclusively for business by the total area of the home. 

2.) Figure the business percentage of the part of your home used only partly for business by following the same method used in Line 1, by only using the area of the home used partly for business.

3.) Add the business percentages you figured in the first two steps and enter the result in the percentage box.

Gross Income from Trade or Business; Form 8829:

Gross Income from Trade or Business:
You will see the tentative profit from Schedule C displayed. Use the Override box to enter the amount of business income that is for business use of home.  

Gains or Losses from Forms 8949 and 4797:
- Enter here, any gain derived from the business use of your home and shown on Form 8949 (and included on Schedule D (Form 1040)) or Form 4797.
- Enter as a positive amount any losses shown on Form 8949 (and included in Schedule D) or Form 4797 that is allocable to the trade or business in which 
  you use your home 

Daycare Where Area is not Exclusively Used for Daycare:

Caution: Only make entries here for Daycare businesses where the area of the home is not exclusive for daycare: 
If part of the home is exclusively and regularly used for providing daycare, leave these fields blank.

Time Used for Daycare:
- Days used for Daycare last year (current tax year): Enter the total amount of days used for the Daycare business.
- Hours used per day: In a 24 hour period, enter the total amount of hours the home is used for this Daycare business.

Number of days home was available for daycare:
-Enter the total amount of days your home was used for this Daycare business. 

Allowable Expenses:

Click the pencil to edit your expenses.

Part I:

Basis of Home:
This will be the smaller amount of the home's adjusted basis, or it's fair market value (FMV) on the date the home was first used for business.

Land Value Included Above:
Enter the total land value included in the basis of home.

Date Home Placed in Service - Business Use:
Enter the Date the home was first placed in service for this business.

Part II:

Expenses have both a Direct and Indirect box. 
- Direct expenses benefit only the business part of your home. They include painting or repairs made to the specific area or rooms used for business
- Indirect expenses are for keeping up and running your entire home. They benefit both the business and personal parts of your home.

Only enter here expense amounts that qualify for the Business Use of Home Deduction. 

Remember to allocate between the business use of home total from the business conducted other places total. Only enter the business use of home totals here. 

Operating Expense Carryover:
Enter any carryover amount of unallowed operating expenses from your prior year Form 8829 here. 

Excess Casualty Loss and Depreciation Carryover:
Enter any carryover amount of unallowed excess casualty losses and depreciation expenses from your prior year Form 8829 here.