Virtual - IRS : Avoiding the Top Tax Mistakes that Small Businesses Make

My name is Kim from the IRS here to talk to you about the most common federal tax form filed by most one-owner businesses, the Schedule C. Schedule C is the tax form filed by most sole proprietors. As you can tell from its title, "Profit or Loss From Business," it´s used to report both income and losses. Many times, Schedule C filers are self-employed taxpayers who are just getting their businesses started. In addition to those who do well at the start, this group can also include new business owners who make very little or no profit or even lose money. There´s also a shorter form, Schedule C-EZ, "Net Profit From Business." You can use the Schedule C-EZ if you have a profit from your business and your expenses are less than $5,000, no inventory, no employees, and you are not using depreciation or deducting the cost of your home. You will need to file Schedule C annually as an attachment to your Form 1040. The quickest, safest, and most accurate way to file is by using IRS e-file either online or through a tax professional that is an authorized IRS e-file provider. Here are a few tips for Schedule C filers. Keep good records. This will help you complete your tax forms accurately. And be sure to have a plan in place to back up and protect all those financial and tax records in case of a disaster. Start making quarterly estimated tax payments to cover your own income tax and Social Security self-employment tax. You can make deposits electronically using the Electronic Federal Tax Payment System, EFTPS. Be sure to also deposit your federal employment taxes for your employees on time using EFTPS and timely file your Form 941, Employer´s Quarterly Federal Tax Return. And if you have workers, follow the tax law to classify them properly as employees or independent contractors. If you need assistance or more information, the IRS has set up a very helpful online resource called the Small Business and Self-Employed Tax Center.

Speaker(s): Daniel Farmer with IRS as our guest speaker

Fee: No Cost