Business Expenses and Schedule C

Overview

The Internal Revenue Service (IRS) reports about 1 percent of small business returns are audited annually. While the number seems small, the IRS has made it a priority to close the "tax gap"-the difference between reported and actual income and expenses. In previous years, the IRS included excessive claims for business credits as one of its "dirty dozen" scams. 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 2019 tax year and to provide an understanding of how to reduce the filing of incorrect or fraudulent returns. We begin with an overview of the business-expense sections on Schedule C and then move to more complex topics in preparing a Schedule C.

Learning Objectives

Upon the successful completion of this course, you 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
  • understand the changes to Schedule C by the Tax Cuts and Jobs Act of 2017 (TCJA)

Tax Year: 2019

Designed For

Tax professionals working to expand or refresh their knowledge of the Schedule C
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