The highest prized benefit of owning your own business is independence. You rely on your skills and have to report to no one but yourself. This is the allure of becoming a real estate agent. Imagine, making a lot of money and working when you want to work. Very appealing to just about anyone, wouldn’t you say? Well, it is all hogwash!
The Schedule C is a section of the Form 1040 to report revenues and expenses associated with a small business operation. In addition to the Schedule C, Schedule SE in attached to calculate the self-employment tax.
Simply put, this is a tax on your net earnings from your small business operation. If you are unincorporated, you have to pay this tax. This includes those in partnership arrangements, and in any form of Limited Liability Company status. Why don’t corporations pay the tax? Actually they do, it’s just called a different name.