LLC/Schedule C/1040

Anyone who operates their business as a sole-proprietorship and has not elected to be taxed as an S-Corporation or a C-Corporation, is required to file a Schedule C with their personal income tax (Form 1040). 

The Schedule C asks about the business name, product/service, business address, accounting method, gross receipts/sales, cost of goods sold, and other deductible business expenses such as advertising, automobile expenses, home office expenses, etc.

When you have chosen to stay as a Schedule C, instead of electing to be taxed as a corporation, the business owner is responsible for 15.3% of the net profits to be paid to Social Security (12.4%) and Medicare (2.9%). If there are no estimated payments made by the taxpayer to the IRS (for Social Security, Medicare, and Federal tax liabilities) there may be underpayment penalties, depending on the amount of tax due at year end.

To complete a Schedule C, filers may need information from the following, if applicable: