Which Forms are required to be filed?

If you are conducting a business make as a sole proprietor, you will be filing Schedule C, on which you list your income and deductible expenses.

Note - a sole proprietor is someone who is in business for themselves. You can have business name, also known as DBA (Doing Business As) and still be a sole proprietor. If you have a partner (even your wife) then go to the Partnership Q section.

Note even if you choose the cash basis of accounting, your cash outflow may not equal your deductible expenses. Certain items are not allowed as business expenses (such as health/life/disability insurance for the owner, penalties, fines, illegal payments, charity contributions, etc.) while others may be limited (meals and entertainment, business gifts, etc.) You need to become familiar with the laws regarding the expenses you incur in your business.

If you buy business equipment or assets for use in your business, you cannot simply expense them on Schedule C. You need to capitalize the cost of the acquisitions on Form 4562, and deduct depreciation in accordance with the instructions. If you qualify, you may be able to write off up to $19,000 of equipment acquisitions under Section 179, explained on the same form.

If your net income from self-employment exceeds $400, you also need to complete and file Schedule SE for your self-employment tax.

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Tax Disclaimer: To ensure compliance with IRS Rules, any U.S. federal tax advice provided in this communication is not intended or written to be used, and it cannot be used by the recipient or any other taxpayer (i) for the purpose of avoiding tax penalties that may be imposed on the recipient or any other taxpayer under the Internal Revenue Code, or (ii) in promoting, marketing or recommending to another party a partnership or other entity, investment plan, arrangement or other transaction addressed herein.