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taxmap/instr/i1040sc-000.htm#TXMP444e3b62

2010 Instructions for Schedule C

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Profit or Loss From Business(p1)

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2010

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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, (b) income and deductions of qualified joint ventures, and (c) certain income shown on Form 1099-MISC, Miscellaneous Income. See the Instructions for Recipient (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.
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What's New(p1)

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Increase in section 179 expense.(p1)
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You may now deduct up to $500,000 of the cost of section 179 property placed in service in 2010. This deduction is phased out if the cost of the property exceeds $2,000,000. The cost of certain qualified real property placed in service in 2010 may also be deducted but is limited to $250,000. For more details, see Pub. 946.
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Extension of special allowance.(p1)
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The special first-year depreciation allowance has been extended to property placed in service in 2010. See Pub. 946 for details on which property is eligible for the special allowance.
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Increased deduction for start-up costs.(p1)
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If your business began in 2010, you can deduct up to $5,000 of certain business start-up costs paid or incurred after October 22, 2004, in tax years before 2010, and up to $10,000 of certain business start-up costs paid or incurred in 2010. See page C-9 for more details.
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Standard mileage rate.(p1)
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The business standard mileage rate for 2010 decreased to 50 cents per mile. See the instructions for line 9 beginning on page C-4 for more details.
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Reportable transaction penalties limited.(p1)
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The penalties for failure to disclose a reportable transaction have changed. See the Instructions for Form 8886 for more details.
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Removal of cellular phones and similar telecommunications equipment from listed property.(p1)
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Beginning in taxable years beginning after December 31, 2009, listed property no longer includes cellular phones and similar telecommunications.
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Excess farm losses.(p1)
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If your Schedule C activity includes processing a farm commodity, any losses you have from that activity may be reduced or eliminated. See page C-7 and the Instructions for Schedule F for more details.
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New credit for small employer health insurance premiums.(p1)
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If your line 14 expenses include the cost of providing health insurance coverage to your employees, you must reduce your expenses by the amount of any credit determined on Form 8941. See page C-5 and Form 8941 and its instructions.