A Schedule C is an IRS tax form that self-employed people and small businesses are required to fill out at the end of the year, in addition to the 1040 tax form. Basically, a Schedule C form is a list of all the income and expenses a business has accrued over the year. Here are three tips to help ensure your Schedule C is accurate.
It’s recommended that you don’t try to fill out a Schedule C on your own (especially if you’re new to business taxes) because it’s somewhat complicated. For example, a Schedule C asks for the total amount you spent on “office expenses” and on “office supplies.” Knowing what expenses go into which category is critical to filing an accurate tax return. Tax professionals, tax prep software, or online accounting tools like Outright can assist you with categorizing and filling out a Schedule C correctly.
With a little help, organizing your tax records on a routine basis isn’t hard, however it does take quite a bit of time if you’re entering data manually. Desktop accounting software can help make this faster but the learning curve is often steep. Online accounting is another alternative and the growing choice for self-employed people and small businesses because it’s easy and affordable.
Whatever method you choose for your bookkeeping, it’s always a good idea to have your records reviewed regularly by a bookkeeper, accountant, or other tax pro. That way when tax time rolls around, you can be confident your Schedule C—and the rest of your tax return—is accurate when you file.
Outright is an online solution that automates common accounting tasks and makes taxes easier. It categorizes all your transactions in the way the IRS expects and, at the end of the year, Outright can instantly create a Schedule C filled out with your information. Print a copy for your tax preparer and she should be able to complete and file your taxes much faster.