Schedule C -- Profit or Loss From Business

If you had your own business or did some consulting/freelance work on the side, you will need to file Schedule C.

Think of Schedule C as your business's profit and loss statement. So not only is all your business income reported here, but so are all associated expenses, like advertising, car expenses, insurance, employee benefit programs, legal and professional services, office expenses.

See this story for a line-by-line discussion of this form.

If your total business expenses were $2,500 or less, you don't have a net loss for the year, you don't have inventory or employees and didn't take a home office deduction, you may qualify to file the Schedule C-EZ, a simpler version of Schedule C.

Big note: If you qualify for trader status for tax purposes, you then can report all your trading expenses on Schedule C. But the tax prep packages are not geared up to automatically do this for you. You will have to go back and override some numbers to get the totals to appear on Schedule C.

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