Happy Friday, all!
We’re just a couple of weeks away from the individual filing deadline. I recently shared some tips for 1120S filers, but I don’t want to leave out my Schedule C entrepreneurs.
The most important thing to remember, even if you work with a preparer, is that you are responsible for what gets filed. A quick review can help you catch issues and better understand your numbers.
Here are a few last-minute checks before you sign:
Review Your Basic Information
Start with the top of your return.
Confirm:
- Name, address, and Social Security Number
- Business name (if applicable)
- Business EIN
- Business code and description
This is how the IRS identifies your business—errors here can cause delays.
Match Your Income to Your Records
Your Schedule C income should match your books.
Compare:
- Gross receipts on Schedule C
- Your Profit & Loss or income records
If you received 1099s, make sure those amounts are included, or at least that they’re less than what’s on your return. The IRS gets copies, too.
Review Your Expenses (Especially the Big Ones)
Focus on your largest categories:
- Advertising
- Contract labor
- Office Expenses
- Meals
- Vehicle or travel
The totals don’t need to be perfect to the dollar, but they should make sense based on your activity. If something looks unusually high or low, ask about it.
Check for Personal vs. Business Expenses
This is a common issue.
Make sure:
- Personal expenses aren’t deducted
- Only the business portion of mixed-use expenses is included
This is especially important for things like your phone, internet, and vehicle.
Understand Your Net Income
Your net profit drives:
- Your income tax
- Your self-employment tax
If your profit is higher than expected, your tax bill will be too. Make sure you understand what’s driving that number.
Questions of the Week
- Does your reported income match what you actually earned?
- Do your expenses reflect legitimate business activity?
- Do you understand how your net income impacts your taxes?
Tool of the Week
The 5-Minute Schedule C Review
Before signing, ask yourself:
- Income → Does this match my records and 1099s?
- Expenses → Do these categories make sense?
- Deductions → Anything personal included by mistake?
- Profit → Does this number feel right?
- Clarity → Can I explain this return at a high level?
If you can confidently answer those, you’re ready to file.
A few focused minutes now can save you from a notice later. You don’t need to know everything—but you should recognize your numbers. I have a few more tax tips in the coming weeks, since I know this is a stressful time.
Hang in there!
Best,
Brian