Sole Proprietor
What schedule are profits from a sole proprietorship reported on?
Schedule C - Use this schedule 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.
1040sse- to figure out self employment tax. - Self-employed business owners include sole proprietors or single-member limited liability company (LLC) and for partners on their share of partnership income. Members in multiple-member LLCs are considered as partners for federal income tax purposes. The self-employment taxes owed based on Schedule SE are for Social Security and Medicare.
SEP and SIMPLE contributions on line 28 for self employed ppl.
Medical premiums for you are line 27 medical premiums for employees would be schedule C.
https://www.thebalance.com/filing-schedule-se-for-self-employment-tax-398469
What rate will profits be taxed at?
The main difference between reporting income from your sole proprietorship and reporting wages from a job is that you must list your business's profit or loss information on Schedule C (Profit or Loss from a Business), which you will submit to the IRS along with Form 1040.
The self-employment tax rate for 2019 is 15.3% of the first $132,900 of income and 2.9% of everything above that amount. Self-employment taxes are reported on Schedule SE, which a sole proprietor submits each year along with a 1040 income tax return and Schedule C.
Social Security - 6.2% on first $132,900
Medicare - 1.45% on all
Additional 0.9% over $200,000 (Single) or $250,000 (MFJ)
Self-Employment - 15.3% on first $127,200
2.9% from $127,200 to $200,000
3.8% over $200,000
http://www.nolo.com/legal-encyclopedia/how-sole-proprietors-are-taxed-30292.html
https://www.thebalance.com/self-employment-taxes-what-you-need-to-know-397678
What is the Self Employment tax?
You are self-employed for this purpose if you are a sole proprietor (including an independent contractor), a partner in a partnership (including a member of a multi-member limited liability company (LLC)), or are otherwise in business for yourself. The term sole proprietor also includes the member of a single member LLC that is disregarded for federal income tax purposes and a member of a qualified joint venture. You usually must pay self-employment tax if you had net earnings from self-employment of $400 or more. Generally, the amount subject to self-employment tax is 92.35% of your net earnings from self-employment. You calculate net earnings by subtracting ordinary and necessary trade or business expenses from the gross income you derived from your trade or business. You can be liable for paying self-employment tax even if you currently receive Social Security benefits.
If you had a loss or small amount of income from your self-employment, it may be to your benefit to use one of the two optional methods to compute your net earnings from self-employment. Refer to the Form 1040, Schedule SE Instructions (PDF) to see if you qualify to use an optional method. An optional method may give you credit toward your Social Security coverage, or increase your earned income credit or the child and dependent care credit.
An employee of a church or qualified church-controlled organization who elected exemption from Social Security and Medicare taxes must pay self-employment tax if the church or qualified church-controlled organization paid more than $108.28 to the employee, unless he or she is personally exempt from self-employment tax. If you are required to pay self-employment tax, you must file Form 1040 (PDF),U.S. Individual Income Tax Return and attach Form 1040, Schedule SE (PDF), Self-Employment Tax. For more information on church related income and self-employment taxes, refer to Publication 517, Social Security and Other Information for Members of the Clergy and Religious Workers.
The law sets the self-employment tax rate as a percentage of your net earnings from self-employment. This rate consists of 12.4% for Social Security and 2.9% for Medicare taxes. The law sets a maximum amount of net earnings subject to the Social Security tax. This amount changes annually. All of your net earnings are subject to the Medicare tax.
Additional Medicare Tax applies to self-employment income above a threshold amount received in taxable years beginning after December 31, 2012. The threshold amounts are $250,000 for a married individual filing a joint return, $125,000 for a married individual filing a separate return, and $200,000 for all others. For additional information, see Questions and Answers for the Additional Medicare Tax on IRS.gov.
Compute self-employment tax on Form 1040, Schedule SE (PDF). When figuring your adjusted gross income on Form 1040, you can deduct one-half of the self-employment tax. You calculate this deduction on Schedule SE. The Social Security Administration uses the information from Schedule SE to compute your benefits under the Social Security program.
Refer to the Form 1040, Schedule SE Instructions (PDF) and Publication 334, Tax Guide for Small Business, for more information on self-employment tax.
http://www.irs.gov/taxtopics/tc554.html
What types of expenses may I deduct from my self-employment income?
To be deductible, a business expense must be both ordinary and necessary. An ordinary expense is one that is common and accepted in your trade or business. A necessary expense is one that is helpful and appropriate for your trade or business. An expense does not have to be indispensable to be considered necessary.
http://www.irs.gov/Businesses/Small-Businesses-&-Self-Employed/Deducting-Business-Expenses#what
Publication 535 / Business Expenses
Can I depreciate the part of my home I use for my business?
Use Form 8829 to figure the allowable expenses for business use of your home on Schedule C (Form 1040) and any carryover to 2015 of amounts not deductible in 2014. You must meet specific requirements to deduct expenses for the business use of your home. Even if you meet these requirements, your deductible expenses may be limited. Part IV is used to figure any allowable carryover of expenses that are more than the limit. For details, see Pub. 587, Business Use of Your Home (Including Use by Daycare Providers).
http://www.irs.gov/Businesses/Small-Businesses-&-Self-Employed/Home-Office-Deduction
Form 8829 Instructions (offers breakdown)
Publication 587 / Business Use of Your Home
Publication 946 / Depreciating Property
What happens if my business operated at a loss?
Publication 536 / Net Operating Losses for Ind, Estates and Trusts– page 3 middle bottom.
Generally, if you have an Net operating loss for a tax year ending in 2014, you must carry back the entire amount of the NOL to the 2 tax years before the NOL year (the carryback period), and then carry forward any remaining NOL for up to 20 years after the NOL year (the carryforward period). You can, however, choose not to carry back an NOL and only carry it forward. See Waiving the Carryback Period, later. You cannot deduct any part of the NOL remaining after the 20-year carryforward period.
Publication 542 / Page 14
Can I carry forward or back losses?
2 years back and 20 years forward
Publication 536 / Page 3 middle bottom – offsets ANY types of income
Business losses are more valuable than capital losses.
Capital losses are carried back 3 years and forward 5.
Pub 542 page 14 right – only offset capital gains and ordinary income up to $3,000 in a year.
Passive losses you can carry forward until you use them or sell the business.
What types of retirement plans can I establish?
http://goingcpa.com/wp-content/uploads/2014/09/Retirement-Plans-Most-Appropriate-for-the-Self-Employed.pdf
Can you review the bonus depreciation under IRC 179 due to ARRA?
Unciteable Explanation Click here
Is prepayment penalty of a business loan deductible as business interest?
You cannot currently deduct interest that must be capitalized, and you generally cannot deduct personal interest. Prepayment penalty. If you pay off your mortgage early and pay the lender a penalty for doing this, you can deduct the penalty as interest.
Pub 535 Business Expenses