IRS schedule C is a form you must fill out each year at tax time if you own your own business. Actually, that needs to be clarified a bit: if your business is not set up as a corporation then you would use IRS schedule C. So if you are self-employed and have a sole proprietorship then you will be doing some Schedule C reporting at tax time.
The official title of IRS schedule C is Profit or Loss from a Business (Sole Proprietorship). You fill it out and include when you do your personal taxes. There will probably be several other forms to fill out besides the Schedule C, also related to owning your own business.
The form is actually pretty straightforward in terms of what it’s asking for. Your sole proprietorship either made or lost money during the year and the IRS wants to know how much either way. They ask you for the following:
- list your income from the sole proprietorship
- your business expenses
If your business involves inventory you will also need to fill out a few more lines on Schedule C. Then after a few minor calculations you arrive at your net profit or net loss and that figure goes on your main income tax return.