How to Continue Reading a File Until End of File in C
![](https://www.reference.com/wp-content/uploads/sites/2/2021/03/6c935d0facaff4d8bdd7895e217b7d58.jpg)
When it comes to utilizing information from different tax forms, the requirements you'll need to follow depend largely on the ways you work and how you're employed. Gig workers, freelancers and other self-employed individuals may need to file a type of tax form that's called 1040 Schedule C. This form helps to determine both the taxes and/or refunds that a self-employed person may receive.
When filing your taxes, it's important to report all income and equally important to properly report expenses. Here's how a 1040 Schedule C form helps you take care of that.
What Is a 1040 Schedule C Tax Form?
In most employment situations, the employer is responsible for deducting necessary payroll taxes — like Social Security and Medicare taxes — from every paycheck, and the employer supplies the employee with a W-2 tax form at the end of the year. The W-2 shows how much the employee earned and how much the employee paid in taxes — it's a form related to traditional salaried or hourly employment.
![](https://www.reference.com/wp-content/uploads/sites/2/2021/03/80f30a9d00f73a21ad22bbfee62e9f52.jpg)
In contrast, a 1040 Schedule C tax form is used to report income that happens outside of a job that deducts taxes from income. Ultimately, the form helps to determine how much the employee will pay in taxes and how much of a refund they'll receive.
1040 Schedule C forms serve a similar purpose for people who work for themselves. These forms show how much a self-employed person has earned. The official title for the 1040 Schedule C is Profit or Loss From Business. Although sole proprietors receive all the income from their businesses, they're also personally responsible for all of the expenses their businesses incur. So, the IRS takes expenses, depreciation and other losses into account.
The 1040 Schedule C form tallies a sole proprietor's income and expenses to determine the total amount the taxpayer will need to pay taxes on for their business in that year.
In respect to the 1040 Schedule C Tax Form, the IRS defines a business as any activity for which "your primary purpose is for income or profit," or "you are involved in the activity with continuity and regularity." This is a broad definition that covers a variety of economic activities.
![](https://www.reference.com/wp-content/uploads/sites/2/2021/03/b87f7389f2220f18c235fb845f1fe68d.jpg)
In most cases, a person needs to report any income — no matter if it comes from rentals, stocks, selling a home or engaging in any other activity — to the IRS. Regarding the 1040 Schedule C, the IRS does note that regularity — again, meaning a person is engaged continuously in activities or transactions that turn a profit — is necessary. This doesn't mean that a real estate agent can make $1 million on one sale and forgo reporting the income because the agent doesn't work regularly on real estate. This does, however, provide some leeway for citizens who make money on endeavors that don't truly constitute business.
For example, two neighbors might make money in the same year for reselling items. One makes $500 in a personal yard sale on one day. The other makes $500 by buying items at yard sales and reselling them online. The person who resells online needs to file a 1040 Schedule C, but the person who had a one-off yard sale does not. This is largely because items sold at a yard sale are typically sold at a loss, meaning you paid more for them initially than you made selling them. If you did earn a profit on an item you sold, you need to report it as again on the Schedule D form.
Note that the definition makes no mention of the way a business is registered. Consider this scenario: Three women have been selling masks in the same tax year. Each of the women made $5,000 over the course of the year by selling masks. One of the women sells masks from her home to her neighbors, and she has never registered her business. Another woman sells masks on Etsy. She has filed a DBA with her local register of deeds, but she does not have an LLC. The third woman sells masks on eBay, and she has filled her business as an LLC with her state.
Despite the different setups, all three of the women need to file a 1040 Schedule C form because they're considered to be running a business. The women regularly participate in an activity for the purpose of making income. They've made significant income over the tax year, and they owe the government a portion of it.
Who Has to File?
Anyone who has made money in a tax year and hasn't already paid taxes on that money needs to file a Schedule C. This can include a sole proprietor who owns a single-member LLC. It can include a person who runs a completely unregistered business. This can include a gig worker who does voiceovers through online job marketplaces. A freelancer who does temporary projects for corporate entities would also need to file.
![](https://www.reference.com/wp-content/uploads/sites/2/2021/03/d93edc104e66753af45a07c74c4df011.jpg)
Sometimes, people who work regularly in the same place also need to file a 1040 Schedule C if they're considered independent contractors. Independent contractors have to file a 1099 form, which is supplied by the company(ies) for which they work, in addition to their Schedule C.
Whether a person considers themselves to be a business owner or not is irrelevant. The 1040 Schedule C is a method of reporting income made outside of a work arrangement that automatically deducts taxes from income. Individuals who do have taxes deducted from their income in one workplace may still need to file a Schedule C if they have a side gig or work as an independent contractor elsewhere.
What Should Be Reported?
In addition to income, it is important to report losses on a 1040 Schedule C tax form. Profit-and-loss sheets and balance sheets for businesses are helpful in documenting these expenses. Anyone who files a 1040 Schedule C should keep careful records of mileage, home office expenses, educational expenses and business purchases.
![](https://www.reference.com/wp-content/uploads/sites/2/2021/03/8296b0edbba28d12c38d59a6608cf2f0.jpg)
If a sole proprietor runs a bakery, the cost of flour and eggs could be reported as an expense on a 1040 Schedule C Tax form. Depreciation of assets is another consideration when reporting losses. While complicated, freelancers may be able to complete this form on their own; owners of single-member LLCs or businesses with more complicated types of expenses would do well to hire a reputable tax professional, such as an accountant or an attorney. A tax professional can help the entrepreneur save money by making sure they report all expenses.
Some business owners overemphasize their expenses to avoid paying high taxes, but there's a caveat. Aside from the fact that it's disingenuous, loan officers use this form to determine the creditworthiness of sole proprietors. Business owners who report significant losses can have trouble getting loans.
The 1040 Schedule C tax form is a tool for sole proprietors to ensure they don't pay too much or too little in taxes. The form considers the income they make along with the expenses that it took to make that income.
Source: https://www.reference.com/business-finance/tax-form-1040c-need-file?utm_content=params%3Ao%3D740005%26ad%3DdirN%26qo%3DserpIndex&ueid=d042db3f-0f91-4096-80e2-ba35f65a2d2b
0 Response to "How to Continue Reading a File Until End of File in C"
Postar um comentário