Schedule C

Forum|Forum|4 years ago
January 17, 2022
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Im only getting about 25% deduction of my schedule C expenses

Best answer by VolvoGirl

Please explain more and where. Aren't the expenses reducing the Net Profit on Schedule C? They don't directly reduce your income tax by the same amount. Maybe you are already getting back all you can and more deductions won't increase it. Some Deductions are limited. Or you still owe for something else. Also after you reduce your income to zero there is no more refund to get back but you still may owe for other things like self employment tax or the 10% early withdrawal penalty from 401k or IRA accounts.

VolvoGirlAnswer

Employee

David HansonAuthor

I did a test. I put gross income at 100K. Then, I put 10K into box 38 Schedule C. I got 3,049.00 credit. That means when I buy an appliance for a client, I'm going to be taxed on about 70% of the value. I don't get it.

VolvoGirl

Employee

Are you keeping an in inventory? Don’t use line 38. Use line 22 for supplies or line 27a for other expenses.

For self employment income on a schedule C you have to enter the total gross income you received (including the product, parts or reimbursements) and then you enter all your expenses. Reimbursements would be an expense. Product and parts would probably be entered as Supplies. Or you can use line 27a Other Expenses. Then only the Net Profit (or Loss) on Schedule C goes to your 1040 and gets taxed.

Critter-3

Did you indicate that everything was "at risk" ?

To change the At Risk box 32 on Schedule C
Go to Business tab-Continue
Click on    I'll choose what I work on
Then…
Business Income and Expenses- Click the Start or Update button

You should see the Business Summary page that lists your businesses

Then click EDIT by the business name and the next screen should be a list of  topics,
Business Profile, Income, Inventory/Cost of Goods Sold, Expenses, Assets, and Final Details last.

Scroll down to Final Details - Click Edit by Special Situations

Make sure the 6th box on the next screen is BLANK. It says...I have money invested in this business that I'm not at risk of losing.  And if you don't have any other boxes on that screen checked then click the last box for None of the above. -  Continue

Then you will be back on the Business Topic screen, if you are done then click Continue at bottom
Then you see thea Business Summary screen listing your business - Click Done

Then you will be back at the Business Info main screen and it should say Done with Business at the bottom.  Click Done with Business.