Last Minute Tips for Filing Schedule C

If You Have Started Your Schedule C - and If You Haven't

Last Minute Tips for Schedule C
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Most small businesses file their business income tax return on Schedule C, as part of their personal tax return. If this is you, you're running out of time. Your personal and business taxes are due on April 15. This article details some decisions you will need to make and what to do if you want to complete your Schedule C by the April 15 deadline

If you haven't started your business tax return:

Get tax software.To start working on your return on your own, you might want to find and download tax software for your business type. You will need to check to be sure that the software version you are considering purchasing and downloading includes Schedule C.

Or Download Schedule C. If you have already purchased software that didn't include Schedule C, you could consider downloading the document and using the instructions for Schedule C from the IRS. Or you may have to upgrade to the version that includes business software. But you must submit both your Schedule C and your 1040 together to the IRS. 

Check on the most recent tax laws to make sure you understand - and take advantage of - any tax changes. The 2017 Tax Cuts and Jobs Act has several benefits to small businesses that can save on taxes, and it also has some reductions to deductions and credits.

Some changes in the new law:

  • Lower business and personal tax rates, and a new tax cut of 20 percent on business income, in addition to normal business tax deductions.
  • But elimination of entertainment expenses as business tax expenses and some tax credits are no longer available.

Understanding the effects of this tax law change can help you pay the lowest tax rate.

You May Be Able to File Schedule C-EZ

Some very small businesses may be able to use Schedule C-EZ to file business taxes, instead of Schedule C. Schedule C-EZ is a simple one-page form which asks you a couple of questions about your income and expenses. This article on Schedule C-EZ explains the requirements for eligibility for using this form. Note that you must meet ALL of the requirements. 

Working on Your Schedule C 

Start working your way through the program. I usually go through once with the information I have and take notes on what I need to get. Then I go back again and plug in the information later. These tax software programs are an excellent way to do a tax return, because they ask you questions about items you might have forgotten.

This article on How to Complete Schedule C takes you through the process of gathering information and completing this form. 

If you have started your business tax return on Schedule C 

Make sure you have taken all allowable deductions and credits. Read through my "Business Tax Deductions A to Z" checklist and note deductions you might be able to take. 

Check for errors before you file. If you make a computation mistake, the IRS will catch it and make the change, but other common errors, like forgetting to sign the return, will cause your return to be rejected.

And don't forget Schedule SE for self-employment taxes. 

All business owners must also complete Schedule SE to calculate the amount of self-employment taxes (for Social Security and Medicare). Schedule SE must be completed even if your business had no profit for the year. It's a relatively complicated form, but if you are using tax software which includes Schedule C, it should also include Schedule SE. Read more about how to complete Schedule SE. 

Add your Schedule C information to your personal tax return, and send it

Check to make sure you have added the Schedule C and Schedule SE information correctly on your personal tax return. 

Determine how you will send your return. You can send a paper copy, you can E-File yourself, or you can let your tax preparer or tax software service E-File for you. In any case, make sure your return is sent on time.

Maybe it would be better to file an extension application

As a last resort, you might want to consider filing an application for an extension. You will still have to compute the estimated taxes and pay before April 18, but an extension will give you time to do a thorough job of preparing your return.