Posts Tagged ‘turbotaxprices’
This article will walk you through the process of filling out a critical part of Schedule C with turbotax service code Home and Business. At the top, the Schedule C are eight questions, labeled with the letters A-H. Here’s what it takes to complete this section.
A. Principal business or profession, product or service. Put a brief description of your business or self-employment activity. It doesn’t have to be long or fancy. Typical examples include consultant, retail store, real estate agent, etc.
B. Enter principal business code. The IRS has a chart with numerous business categories and a corresponding 6-digit numeric code. If you’ve done Schedule C before and know what your code is, just input that number again. But if this is your first time, or you’re not sure what your code is, click on the QuickZoom button to the right and you’ll be taken to a screen that lists all the various business categories in alphabetical order. Scroll through the list until you find the right one, then click on the box to the left of the code and the numeric code will automatically get transferred into the appropriate field on Schedule C.
C. Business name. In case you have a business name other than your personal name, input that here. Some Sole Proprietors have a “DBA” or a Doing Business As the name that is used on signage and advertising. Others don’t. So if you don’t have a DBA, don’t sweat it. You aren’t required to have one for Schedule C reporting purposes, and if that’s the case, leave this field blank.
D. Employer identification number (EIN). Again, you may have one or you may not have one. If you have employees, you should have one. But many self-employed people are flying solo, so it is quite common for a Sole Proprietor to not have an EIN.
E. Business street address. If you did check the box earlier that says “Check this box if you use your home address as your business address”, then your home address should already be in this field. But if you have separate business address that is different than your home address, input that here.
F. Accounting method. There are three choices here: Cash, Accrual, and Other. Most Sole Proprietors use the Cash method, which means you report income in the year you receive it and you report expenses in the year you pay them. The Accrual method means you report income in the year you bill it, regardless of when you receive it, and you report expenses in the year you incur them, regardless of when you pay them. If you are not sure whether you are Cash or Accrual, you should get some help on this. There is also a method known as the Hybrid method, which is a combination of Cash and Accrual, and if that is the method you are using, check the Other box and input “Hybrid”.
G. Did you materially participate in operation of this business during the year? It is likely that your answer is Yes, otherwise, why would you be filing Schedule C?
H. If you did start or acquired this business during the year, checks here. In other words, check this box if this is the first year for this business. Otherwise, leave it blank.