Schedule C: profit or loss from business

• Author: Nicholas L. Bourdeau
• Pages: 41-62

5-1

Chapter 5

Schedule C

Profit or Loss From Business

TABLE OF CONTENTS

§5:00 THEORY

§5:10 LINE BY LINE

§5:10.1 Line A Principal Business or Profession, Including Product or Service

§5:10.2 Line B Enter (Business) Code

§5:10.3 Line C Business Name. If no separate name, leave blank.

§5:10.4 Line D Employer ID Number (EIN) if Any

§5:10.5 Line E Business Address

§5:10.6 Line F Accounting Method: (1) Cash, (2) Accrual, or (3) Other

§5:10.7 Line G Did You Materially Participate in the Operation of This Business?

§5:10.8 Line H If You Started or Acquired This Business During the Tax Reporting Year, Check Here

§5:10.9 Line 1 Gross Receipts or Sales

§5:10.10 Line 2 Returns and Allowances

§5:10.11 Line 3 Subtract Line 2 From Line 1

§5:10.12 Line 4 Cost of Goods Sold

§5:10.13 Line 5 Gross Profit

§5:10.14 Line 6 Other Income

§5:10.15 Line 7 Gross Income

§5:10.16 Line 8 Advertising

§5:10.17 Line 9 Car and Truck Expense

§5:10.18 Line 10 Commissions and Fees

§5:10.19 Line 11 Contract Labor

§5:10.20 Line 12 Depletion

§5:10.21 Line 13 Depreciation and Section 179 Expense

§5:10.22 Line 14 Employee Benefit Programs (other than line 19)

§5:10.23 Line 15 Insurance (other than health)

§5:10.24 Line 16a & 16b Interest: Mortgage (paid to banks, etc.) & Other

§5:10.25 Line 17 Legal and Professional Services

§5:10.26 Line 18 Office Expense

§5:10.27 Line 19 Pension and Profit Sharing Plans

§5:10.28 Line 20a Rent or Lease; Vehicles, Machinery, Equipment

§5:10.29 Line 20b Rent or Lease; Other Business Property

§5:10.30 Line 21 Repairs and Maintenance

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The Determination of Income for Child Support 5-2

§5:10.31 Line 22 Supplies (not included in Part III)

§5:10.32 Line 23 Taxes and Licenses

§5:10.33 Line 24a Travel

§5:10.34 Line 24b Meals and Entertainment

§5:10.35 Line 25 Utilities

§5:10.36 Line 26 Wages (less employment credits)

§5:10.37 Line 27 Other Expenses

§5:10.38 Line 28 Total Expenses

§5:10.39 Line 29 Tentative Profit (Loss)

§5:10.40 Line 30 Expenses for the Business Use of Your Home

§5:10.41 Line 31 New Profit or (Loss)

§5:10.42 Line 32 If You Have a Loss...

§5:10.43 Cost of Goods Sold - General

§5:10.44 Line 33 Method(s) Used to Value Closing Inventory

§5:10.45 Line 34 Was There Any Difference in Valuing Beginning and Closing Inventory?

§5:10.46 Line 35 Inventory at Beginning of Year

§5:10.47 Line 36 Purchases Less Cost of Items Removed for Personal Use

§5:10.48 Line 37 Cost of Labor; Do Not Include Amounts Paid to Yourself

§5:10.49 Line 38 Materials and Supplies

§5:10.50 Line 39 Other Costs

§5:10.51 Line 40 Add Lines 35 Through 39

§5:10.52 Line 41 Inventory at End of Year

§5:10.53 Line 42 Cost of Goods Sold

§5:20 BATTLE LINES

FORMS

QUICK TAKE

Schedule C of Form 1040 Profit or Loss From Business reports the results of operations

for a parent who owns and operates a business. Due to the amount of control a parent has

over his or her business, the income reported, and the expenses that are reported, this area

should be carefully reviewed by investigators.

WHAT YOU SEEK

Schedule C Form 1040

Check registers

General ledgers

Other business records as necessary

RESOURCES

Instructions For Schedule C Form 1040

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