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BogeyS
Level 1

How to fill up Schedule C for business in foreign country.

I live abroad - in Poland and have a business there. I'm an US citizen and file US taxes in addition to taxes in Poland. I also apply for foreign tax credit on the business profit.

How should I fill up all the details of the schedule C? I have my tax forms from Poland, where I have total income , expenses, and net income. Should I fill up all the details of Schedule C regarding expenses in different categories? The tax rules are different here, so t is hard to match. I just want to enter total income and total expenses in Other expenses line, so the outcome will match the net profit. 

Is it valid, or I need to brake all business expenses into US tax forms categories, which is very difficult and time consuming? It would be like a double accounting effort.

Thank you for suggestions.

1 Best answer

Accepted Solutions
AmyC
Expert Alumni

How to fill up Schedule C for business in foreign country.

Yes, you can. The IRS looks at the amount spent in each category and compares it to the averages for your industry. You can put it all in one box of other, it will just throw off the way the IRS looks at your return. As long as the net effect is the same and you have the paperwork in case of audit, you can do that. 

Of course, breaking things down makes it easier on the IRS and may save an inquiry later.

 

If it is a truly large task, I would put it all under "other expenses". If the IRS ever asks, mail them copies of the receipts.

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1 Reply
AmyC
Expert Alumni

How to fill up Schedule C for business in foreign country.

Yes, you can. The IRS looks at the amount spent in each category and compares it to the averages for your industry. You can put it all in one box of other, it will just throw off the way the IRS looks at your return. As long as the net effect is the same and you have the paperwork in case of audit, you can do that. 

Of course, breaking things down makes it easier on the IRS and may save an inquiry later.

 

If it is a truly large task, I would put it all under "other expenses". If the IRS ever asks, mail them copies of the receipts.

**Say "Thanks" by clicking the thumb icon in a post
**Mark the post that answers your question by clicking on "Mark as Best Answer"

View solution in original post

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