What is business income?
What is business income?Business income is money you earn from a sole proprietorship, a small business or self-employment work. That’s a small explanation for a big range of situations. Need help filing your taxes? Book an online appointment
The key point is: It’s how you earn the income that makes it business income, not the amount or the setting or anything else. If you earn income by selling services or goods in an independent manner, then that specific income counts as business income.
What is a business expense?
This is something you paid for so you could do the work to make this money. When you report a business expense, you need to match the expense with the specific business it was for. This part of reporting your business expenses is key to getting your taxes done right. Need help filing your taxes?
Here’s where it can get detailed. If you spent money on things for your W-2 job or a job search, you would report that as a job-related expense. Even though they might seem similar, a job-related expense is actually different from a business expense.
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What is a Schedule C?
Schedule C is the tax form that lists your business income and expenses. It doesn’t come in the mail like a W-2 with pre-filled info. Instead, it gets created and filled in as you do your taxes, and at the end, it’s filed as part of your personal tax return. Need help filing your taxes? Book an online appointment