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HHM Finance Night - Tax Form Schedule C
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HHM Finance Night - Tax Form Schedule C

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Tips for understanding and completing IRS tax form Schedule C

Tips for understanding and completing IRS tax form Schedule C

Published in: Economy & Finance

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  • 1. 1 Small Bus - Schedule C and Other Tax Forms Presented by: Jennoa R. Graham, Ph.D. Friday, April 12, 2013
  • 2.  Income – Money that is received in exchange for a product, service or contract agreement  Expense – Money that is paid out in exchange for a product, service or contract agreement  Depletion – consumption of a resource faster than it is replenished (natural resources)  Self Employment (SE) Tax – tax rate applied to SE income in addition to federal taxes 2 Income – Expenses = Profit (Loss) = Surplus (Deficit) Profit = Surplus Loss = Deficit
  • 3.  Estimated Tax – Installment payments made by independent contractor/ SE owner from the total income received for services or product sales  IRS Form 1040-ES – voucher used to submit estimated federal income tax installment payments  GA Form 500ES - voucher used to submit estimated Georgia state income tax installment payments 3
  • 4.  Briefly review tools for calculating the dollar amount of estimated tax  Review components of Schedule C – Profit (Loss) From a Business  Review components of Form 8829 – Expenses for Business Use of Your Home  Review components of Schedule SE – Self Employment Tax 4
  • 5.  Federal Installments- Voluntary  1040-ES Estimated Tax Worksheet (Prepay)  Tax Season (1040-V, may include penalty fees)  See www.irs.gov for more information  State of GA Installments – Voluntary  500-ES Individual and Fiduciary Estimated Tax Payment Voucher (Prepay)  GA-9465 Installment Agreement Request (Tax Season)  See www.etax.dor.ga.gov for more information 5 Also see “Tax Withholdings and Estimated Payments” presentation and documents
  • 6.  Information Section – Basic information about the business  Part I – Income and Cost of Goods Sold  How much money did you make?  Are sales properly recognized?  Part II – Expenses (Home use excluded)  Business use of home and Net Profit (Loss) 6
  • 7.  Part I - Quantifies how much of your home is used for business  Part II – Calculates the allowance (deduction) assigned to the quantified use of your home  Part III – Home Depreciation assigned to quantified use of your home  Part IV – Casualty losses and negative operating expense are not deductible 7 *See tax advisor
  • 8.  Short form vs. Long form  Short = less detail  Long = more detail  Church employee or farming income = Long  Determines if SE tax applies to income  Calculates amount of tax owed 8
  • 9.  What form is used to file GA estimated taxes?  Form 500ES  What line on Schedule C would tax preparation fees be reported?  Line 17  What line on Schedule C would home real estate taxes be reported?  Line 30  What is the minimum dollar amount earned to qualify for self-employment tax?  $400 9
  • 10. 10
  • 11.  IRS (2013). Tax forms and definitions. Internal Revenue Code, Retrieved March 5, 2013, from http://www.irs.gov  GA Dept of Revenue (2013). Tax forms and definitions. Office of Tax Policy, Retrieved March 6, 2013, from http://etax.dor.ga.gov  The American Heritage® Dictionary of the English Language (2009), Fourth Edition, Houghton Mifflin Company. Retrieved March 6, 2013, from http://www.thefreedictionary.com 11