Schedule C – Profit or Loss From Business

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Schedule C for Sole Proprietorship

Use Schedule C (Form 1040) to report income or (loss) from a business you operated or a profession you practiced as a sole proprietor. An activity qualifies as a business if your primary purpose for engaging in the activity is for income or profit and you are involved in the activity with continuity and regularity. For example, a sporadic activi-ty, not -for-profit activity, or a hobby does not qualify as a business. To report income from a nonbusiness activity, see the instructions for Schedule 1 (Form 1040), line 8.

Also, use Schedule C to report (a) wages and expenses you had as a statutory em-ployee, (b) income and deductions of certain qualified joint ventures, and (c) certain amounts shown on a Form 1099, such as Form 1099-MISC, Form 1099-NEC, and Form 1099-K. See the instructions on your Form 1099 for more information about what to report on Schedule C.

You may be subject to state and local taxes and other requirements such as business licenses and fees. Check with your state and local governments for more information

Instructions for Schedule C

2020 Schedule C (Form 1040) Form

News in 2020

Standard mileage rate. The business standard mileage rate for 2020 de-creased to 57.5 cents per mile.Excess business loss limitation.The excess business loss limitation under section 461(l) has been retroactively re-pealed and will not apply for 2020.The Families First Coronavirus Re-sponse Act (FFCRA).FFCRA pro-vides businesses with tax credits to cov-er certain costs of providing employees with required paid sick leave and expan-ded family and medical leave reasons re-lated to the coronavirus. Under the FFCRA, the amount of these credits is included in the recipient employers’ gross income. Report these amounts as “other income” on line 6. For more in-formation about these credits, including FAQs, visit IRS.gov/coronavirus/new-employer-tax-credits