Self-employed taxpayers report their business income and expenses on Schedule C.
Each year, sole proprietors have the chore of preparing and filing Schedule C with their 1040 to show the IRS whether their business had a taxable profit or a deductible loss. (For tax years before 2019, if your business expenses were $5,000 or less for the year, you may qualify to file the short form, Schedule C-EZ.) Schedule C can seem daunting, but filing will be easier if you plan ahead and keep good records.
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