Understanding Schedule C taxes

The nation's 18 million micro-business owners-and those who hope to join them some day-have a new book to help them navigate Schedule C for reporting their taxes and for mapping tax strategies for the future.

Written by Robert Hughes, a leading self-employment and tax expert and president of the National Association for the Self-Employed (NASE), Schedule C from A to Z de-mystifies federal tax codes and guidelines that specifically apply to sole proprietors. The book helps filers minimize their tax liability and avoid filing mistakes that can trigger an IRS audit.

"As the backbone of the nation's economy, it's critical that the self-employed receive every deduction they are entitled to as the basis for reinvesting in their businesses, especially in today's challenging environment," says Hughes.

Using a simple-to-follow tutorial approach, the book takes owners step-by-step through each line of the Schedule C form and includes information to educate filers on IRS rules that many find complex and bewildering. The book helps entrepreneurs better organize records throughout the year to yield more thorough record-keeping and more productive reporting.

For each line and category of the Schedule C form, Hughes explains IRS interpretation, along with a checklist of what can and cannot be reported under each heading. For example, the book advises close scrutiny of categories that on the surface may sound like catch-all reporting sections, such as line 18-"Office Expenses." Despite wording that suggests otherwise, this category is not intended for expenses pertaining to office supplies, furniture or rent, which are to be reported elsewhere. Instead, this category is for reporting a litany of miscellaneous items, from janitorial services and bottled water to maintenance service for plants.

Through the NASE, micro-business owners have a wealth of additional information to help alleviate the headaches of tax season. TaxTalk provides a free online resource for personalized advice for all micro-business owners, even those who are not NASE members. In addition, TaxCentral gives NASE members a one-stop online source for tax information including easy-to-use calculators to help figure estimated taxes.

The NASE is the nation's leading resource for the self-employed and micro-businesses, bringing a broad range of benefits to help entrepreneurs succeed and to drive the continued growth of this vital segment of the American economy. For more information, visit www.nase.org or call 800-232-6273.

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