Archive for the ‘Schedule C’ Category
First up is Lines I and J. This is the IRS’ trap to get more Form 1099 compliance. Be very careful how you answer these questions because if you have a large amount of expenses like professional fees and repairs, you could be opening yourself up to a notice or having the IRS take a second look at your return.
Also new is line 1a. This is to report income from the new Form 1099-K that reports merchant card and third party payments. If you take credit cards or use paypal, look for your 1099-K and this is where you’ll report that income.
Also new is line 27b. Right now it’s reserved for future use. I’m not sure where they’re going with that one so if someone knows, feel free to leave a comment.
That’s it. These are the first changes to these forms in a while and it gives a pretty good indication of what the IRS is on the lookout for. Their budget is being cut so they’re looking to 1099 compliance to help them out and they’re at least making taxpayers think about the 1099 issue by answering the questions.