Taxing Small Business

About 134 million Americans will file tax returns in the coming weeks. And about 20 million of those returns will include Schedule C - the page that reports your income from self-employment. Whether you're a freelance writer, or a baby sitter, or a seller on eBay(EBAY Quote), if you have earned income that wasn't taxed as wages, you'll have to file Schedule C.

That's the bad news -- more work reporting income for the self-employed. But the good news is that being self-employed means you also get more potential deductions.

Figuring out how much you owe in taxes can be quite a challenge for the self-employed. It becomes even more complicated if you also have a regular job, with income that is reported from your employer on a W-2 form. Separating not only income, but deductions, can be a paperwork nightmare.

That's where TurboTax Home and Business comes in. The latest version of this product serves as a guide to sorting out your personal and business income and deductions. One click displays all the forms you need -- both your personal 1040 form and the Schedule C, which will be filled out together. Because this program is specifically designed for people in your situation, the business income on Schedule C is the first priority.

Life will be a lot simpler at tax time if you've kept a separate checking account and credit card for your business. Then the payments that you've deposited into your business checking account provide a simple record of your income. If you're banking online or using QuickBooks or Quicken (part of the TurboTax family) there will be a place to record each source of income.