Income
 
BUSINESS INCOME (Schedule C)
 
 
Business Consulting
 
Applicable Income and Expenditure Items (More)
 
  • Income
  • Cost of goods Sold
  • Expenses
  • Home used as Business
  • Vehicles used in Business
  • Depreciation on Assets other than vehicle
 
What type of income is included in Business - Consulting?
 
In Business - Consulting, report income or loss from a business you operated or a profession you practiced as a sole proprietor. Also report wages and expenses you had as a statutory employee.
 
What do you mean by type of business?
  Type of business means business or profession activity that provided your principal source of income. You can give general field or activity and the type of product or service. For e.g. Mining, Manufacturing, Health care & Social Assistance, Construction of Building, Real Estate, Restaurant, Child care, Entertainment, Utilities etc
 
What is meaning of Business Code?
  Business code means specific code for different type of business activity given by the IRS for each business or consulting activity. The IRS has assigned six digits Code for different type of business and services.
 
Why I need an EIN?
  If you satisfy any of the below laid conditions you have to get an EIN.
  • If you have employees.
  • If you have and you operate your business as a corporation or partnership.
  •  If you file any of these returns: employment, excise, alcohol, tobacco & firearms.
  •  If you withhold taxes on income, other than wages     paid to a non resident alien.
  • If you have a Keogh plan.
  • If you have been involved with any of these organizations: Trusts, except certain grantor owned revocable trust, exempt organization business income tax returns. Estates, Real estate mortgage investment conduits.
  • Non profit organization. Farmer’s Co operatives.
 
Which Accounting Method You Follow?
  The method you use depends on your business. You choose the accounting method that best describes your situation. The methods are:

- The cash method -- You can to use this method if you don't hold goods for sale and you don't have an inventory. For example, you can use the cash method if your business provides only consulting services.

- The accrual method -- You generally use this method if you sell goods and keep an inventory of the items you sell. For example, if you sell clothing, you generally use the accrual method to account for your inventory purchases and your sales.

- A combination of the cash and accrual methods whatever method you use, you MUST use it consistently.