Business Expenses and Schedule C

Study Level:  Basic
Delivery Method:  Online self-study
Provider of Record: WebCE
Tax Year: 2017
Field of Study: Taxes
Prerequisite: None

Course Description

The Internal Revenue Service (IRS) reports that about 1 percent of small business returns are audited each year as part of its effort to close the “tax gap”—the difference between reported and actual income and expenses. The IRS has reported that the top five abusive transactions of 2011 included sham businesses (which reported large losses) and false or inflated business deductions. Based on this information, for the 2012 tax year field examiners were instructed to focus on small business flow-through entities, including sole proprietorships and single-member limited liability companies (SMLLC) that did not elect to be treated as a corporation.

In 2017, the IRS continues to include excessive claims for business credits as one of its "dirty dozen" scams that it focuses on.

In working with a small-business owner, a tax preparer must not only ask questions about expenses, but also understand the rules for deducting those expenses in order to prepare a return that is audit-proof. 

The purpose of this course is to provide a thorough review of business expenditures that may be deductible on Schedule C for the 2017 tax year and provide an understanding of how to reduce the filing of incorrect or fraudulent returns. The course begins with an overview of the business-expense sections on Schedule C and then moves to discuss the more complex topics in preparing a Schedule C.

Learning Objectives:

After completing this course students will be able to:
  • identify the types of business expenses that are reported  in Parts II, IV and V of Schedule C
  • correctly apply the rules for determining the deductible amount when given examples of business-related expenses
  • determine whether a given taxpayer is eligible to claim a home office deduction, and correctly calculate the available deduction
  • correctly calculate the available deduction for given taxpayers for car, travel, meal and entertainment expenses
  • apply the appropriate rules to determine whether the IRS is likely to regard a given worker as an employee or an independent contractor
Last Revised: 11/2017
Find Courses Now