Lisa/ChefBear
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Schedule C is a tax form used by self-employed individuals to report their business income and expenses. It is used to calculate the net profit or loss for the business, which is then included in the individual's personal tax return.
Schedule C is typically used by sole proprietors, freelancers, and independent contractors who are self-employed and have a business that is not registered as a separate legal entity.
Yes, you can still take the standard deduction even if you use Schedule C. The standard deduction is a set amount that you can deduct from your taxable income without having to itemize your deductions. However, the net profit from your business reported on Schedule C will be included in your total taxable income.
If your business expenses exceed your business income, you will have a net loss for the year. This loss can be used to offset other income on your tax return, such as wages or investment income, which can potentially reduce your overall tax liability.
It is important to keep accurate records of all your business income and expenses throughout the year, as you will need this information to complete Schedule C. This includes receipts, invoices, bank statements, and any other relevant documents. It is also recommended to keep these records for at least three years in case of an audit by the IRS.