Internal Revenue Service United States Department of the Treasury
Level Basic Advanced Military International

Income — Business; Form 1040, Line 12 Workout

Out of Scope

Out of Scope Situations for VITA/TCE

The following are out of scope for this lesson. While this list may not be all inclusive, it is provided for your awareness only.

Schedule C with:

  • Hobby income or not-for-profit activity
  • Expenses over $10,000
  • Return and allowances
  • Cost of goods sold
  • Other income
  • Expenses for employees
  • Business use of home
  • Casualty losses
  • Vehicle expenses reported as actual expenses
  • Depreciation
  • Rental or lease expenses—vehicle, machinery, and equipment leases of more than 30 days
  • Accounting methods other than the cash method
  • Net losses
  • A "No" response that indicates the taxpayer does not meet any of the tests of material participation, or is uncertain about materially participating in a business
  • Taxpayers receive any credit card or similar payments that included amounts that are not includible in income
  • A "Yes" response indicating there is a requirement to file Form(s) 1099