Previous Page: Instructions - Part III. Foreign Accounts and Trusts Next Page: Instructions - General Instructions Use   to find additional occurrences of topic items.

2007 Instructions for Schedule C

taxmap/instr/i1040sc-000.htm#TXMP00ae32f9 Profit or Loss From Business

2007

Use Schedule C (Form 1040) to report income or loss from a business you operated or a profession you practiced as a sole proprietor. An activity qualifies as a business if your primary purpose for engaging in the activity is for income or profit and you are involved in the activity with continuity and regularity. For example, a sporadic activity or a hobby does not qualify as a business. To report income from a nonbusiness activity, see the instructions for Form 1040, line 21, or Form 1040NR, line 21.

Also, use Schedule C to report (a) wages and expenses you had as a statutory employee, and (b) certain income shown on Form 1099-MISC, Miscellaneous Income. See the Instructions for Recipients (back of Copy B of Form 1099-MISC) for the types of income to report on Schedule C.

Small businesses and statutory employees with expenses of $5,000 or less may be able to file Schedule C-EZ instead of Schedule C. See Schedule C-EZ for details.

You may be subject to state and local taxes and other requirements such as business licenses and fees. Check with your state and local governments for more information.

taxmap/instr/i1040sc-000.htm#TXMP2f584229 What's New

taxmap/instr/i1040sc-000.htm#TXMP412f395b Revised activity codes.

Some of the principal business or professional activity codes beginning on page C-8 have been revised and some codes have been deleted. Be sure to check the list before you enter your code on line B.

taxmap/instr/i1040sc-000.htm#TXMP1ad8272c Indian employment credit has been extended.

The Indian employment credit has been extended for qualified wages paid to an employee through December 31, 2007.

taxmap/instr/i1040sc-000.htm#TXMP1afbdc6b Work opportunity credit and welfare-to-work credit extended and combined.

For 2007, both credits have been combined, modified, and extended for qualified wages paid to an employee.

taxmap/instr/i1040sc-000.htm#TXMP1dfad8ff Husband-wife business.

Beginning in 2007, you and your spouse, if you are filing married filing jointly, may be able to make a joint election to be taxed as a qualified joint venture instead of a partnership. See Exception—Qualified joint venture under Husband-wife business on this page.

taxmap/instr/i1040sc-000.htm#TXMP42d207f3 Section 179 deduction increased.

For property placed in service in 2007, the limit for the section 179 deduction to expense certain depreciable business property has been increased to $125,000. This limit will be reduced when the total cost of section 179 property placed in service during the tax year exceeds $500,000.

taxmap/instr/i1040sc-000.htm#TXMP4db78e57 Hurricane Katrina housing credit has expired.

This credit was available for lodging furnished to qualified employees between January 1, 2006, and July 1, 2006, and was claimed on Section B of Form 5884-A.

Previous Page:  Instructions - Part III. Foreign Accounts and Trusts Next Page:  Instructions - General Instructions Use   to find additional occurrences of topic items.