The Internal Revenue Service requires people who are in business for themselves to use Schedule C when filing taxes to report their business income. These include sole proprietors -- including spouses who jointly own the company, both participate in the company, and file a joint return -- as well as independent contractors and statutory employees. Schedule C shows all of the income and expenses for the business during the year. You must file an income tax return if your self-employment income exceeds $400, because you will owe self-employment taxes.
Schedule C-EZ Alternative
If your business made a profit and meets certain other requirements, you can file a shorter Schedule C-EZ instead of the full Schedule C. To qualify, your expenses can't exceed $5,000, you can't have any employees or inventory, and you can't be depreciating or deducting the cost of your home as a business expense.
If you're in business for yourself but you work with others, such as in a partnership or S corporation, you report your business income and expenses on Schedule E instead of Schedule C. You also use Schedule E for rental income and expenses.
Based in the Kansas City area, Mike specializes in personal finance and business topics. He has been writing since 2009 and has been published by "Quicken," "TurboTax," and "The Motley Fool."