If you are in business then you report all your income & expenses and they are netted so you only pay taxes on the profit.
If you are an unincorporated sole proprietor then you will complete the Sch C by entering all your income & expenses. Follow the interview screen by screen and read everything ... go slow and don't skip about.
To get to Schedule C in TurboTax Home & Business:
1. Go to "Business" at the top of the screen
2. Select "Continue" then "I'll choose what I work on"
3. Select "Start" next to "Business Income and Expenses"
4. Proceed to enter your business information and answer the interview questions
5. When you get to the "Your Business" page: Business Profile, Business Income and Expenses, Inventory/Cost of Goods Sold etc., this is Schedule C
There are 17 unique categories for entering business expenses in the TurboTax Home and Business program for a Schedule C ( in addition to the vehicle, home office & assets sections). If you have a particular expense that does not fit in the other 16 categories listed use Other Miscellaneous Expenses at the bottom of the list.
· Click on Business
· Click on Business Income and Expenses
· Click on I'll choose what I work on
· On Profit or Loss from Business, click on the start or update button
On the next screen, click on Edit for your business listed.
On the next screen scroll down to Business Expenses
On Other Common Business Expenses, click on the start or update button
If you are acting as your own bookkeeper and tax preparer you need to get educated ....
If you have net self
employment income of $400 or more you have to file a schedule C in your
personal 1040 return for self employment business income. You may get a 1099-Misc for some of your
income but you need to report all your income. So you need to keep your
own good records. Here is some reading
IRS information on Self Employment….
Publication 334, Tax Guide for Small Business
Publication 535 Business Expenses
Home Office Expenses … Business Use of the Home
There is also QuickBooks Self Employment bundle you can check out which includes one Turbo Tax Home & Business return and will help you keep up in your bookkeeping all year along with calculating the estimated payments needed ....
Self Employment tax (Scheduled SE) is generated if a person has $400 or more of net profit from self-employment on Schedule C. You pay 15.3% for 2014 SE tax on 92.35% of your Net Profit greater than $400. The 15.3% self employed SE Tax is to pay both the employer part and employee part of Social Security and Medicare. So you get social security credit for it when you retire. You do get to take off the 50% ER portion of the SE tax as an adjustment on line 27 of the 1040. The SE tax is already included in your tax due or reduced your refund. It is on the 1040 line 57. The SE tax is in addition to your regular income tax on the net profit.
For SE self employment tax - if you have a net profit (after expenses) of $400 or more you will pay 15.3% for 2015 SE Tax on 92.35% of your net profit in addition to your regular income tax on it. So if you have other income like W2 income your extra business income might put you into a higher tax bracket.
You must make quarterly estimated tax payments for the current tax year (or next year) if both of the following apply:
- 1. You expect to owe at least $1,000 in tax for the current tax year, after subtracting your withholding and credits.
- 2. You expect your withholding and credits to be less than the smaller of:
90% of the tax to be shown on your current year’s tax return, or
100% of the tax shown on your prior year’s tax return. (Your prior year tax return must cover all 12 months.)
To prepare estimates
for next year, You can just type W4 in the search box at the top of your return
, click on Find. Then Click on Jump To and it will take you to the estimated
tax payments section. Say no to changing your W-4 and the next screen will
start the estimated taxes section.
OR Go to….
Federal Taxes or Personal (H&B version)
Other Tax Situations
Other Tax Forms
Form W-4 and Estimated Taxes - Click the Start or Update button