If I have a business/side hustle, business filing or individual tax return?

Filing the Schedule C with your personal Form 1040 is the simplest option, but it depends on what, if any, elections you have made. 

 

Where do I enter Schedule C? 

 

If you operate a business using a single or multi-member limited liability company (LLC), then you have more flexibility in choosing how the IRS taxes your business earnings.  Your choice will directly influence the tax filing rules you are subject to.   There's no set of tax rules that specifically apply to LLCs.   The IRS allows an LLC to use partnership, corporate (C-corp or S-corp) or sole proprietor tax rules.

 

Single Member LLCs - IRS

 

If this is your first year filing taxes for your business, here are a few ways to identify how your business is set up:

 

• Did you file a Form 2553 with the IRS to turn a C-corp or LLC into an S-corp?  If so, your business is set up as an S-corp.
• Do you have a partnership agreement or operating agreement?  If so, your business is set up as a Partnership.
• If you run the business as an LLC and you're the sole owner, you have a Sole Proprietorship.
• What did you select when you created your EIN?  This will also tell you how the business is set up.

If this isn't the first time filing and the business setup hasn't changed, use last year's tax return:

 

• Form 1040 with Schedule C is Sole Proprietorship.
• Form 1120-S is S-corp.
• Form 1065 is Partnership.

 

What type of entity is my business?