Schedules C and C-EZ
Business income is reported on either:
If preparing Schedule C, Part I, the following are out of scope for VITA/TCE programs: return and allowances, cost of goods sold (involves inventory), and other income. Taxpayers with these items should be referred to a professional tax preparer.
Figure the net profit or loss by subtracting the business expenses from business income. The net profit or loss will be reported on Form 1040, line 12. The net profit will also need to be shown on Schedule SE in order to calculate the self-employment tax. Schedule SE will be covered in a later lesson.
VITA and TCE tax preparers who are certified through Advanced level or higher can assist with preparation of Schedule C-EZ or limited Schedule C.