📚 TEAM TAX EDUCATION: SCHEDULE C BASICS Schedule C (Form 1040), Profit or Loss From Business, reports income and expenses from a business operated as a sole proprietor. The activity must be pursued for income or profit and conducted regularly. A hobby does not automatically qualify. What should we review when preparing a Schedule C? ✅ Report all business income. Include cash, checks, and payments through apps or cards—even when the client did not receive a Form 1099. Reconcile records so the same payment isn’t counted twice. ✅ Deduct qualifying business expenses. Expenses generally must be ordinary—common in that business—and necessary—helpful and appropriate. Personal and family expenses generally aren’t deductible. ✅ Review supporting records. Receipts, invoices, payment records, and other documentation should establish the amount, date, and business purpose of expenses. ✅ Check self-employment tax. Net earnings from self-employment of $400 or more generally require Schedule SE. That threshold relates to self-employment tax; it is not a blanket exemption from reporting business income. 💡 Example: A service business earns $20,000 and has $5,000 in allowable expenses. Its Schedule C net profit is $15,000, assuming no other adjustments. Self-employment tax is calculated separately. Team reminder: Ask questions when income or expenses are unclear. Use the instructions for the tax year being prepared and document how the reported figures were determined. 🔗 IRS learning resources: Schedule C overview Schedule C instructions Publication 334: Tax Guide for Small Business

PTIN Reminder for the 2027 Filing Season Tax professionals preparing federal tax returns for compensation must have a valid Preparer Tax Identification Number (PTIN). To prepare 2026 tax returns during the 2027 filing season, preparers must obtain or renew their PTIN for calendar year 2027. The IRS generally opens PTIN applications and renewals in mid-October, so watch IRS.gov beginning in October 2026. Complete the process by December 31, 2026, because PTINs expire at the end of each calendar year. Online applications and renewals usually take approximately 15 minutes. First-time applicants must create an account, complete the application, and pay the required fee. Existing preparers can sign in and renew their PTIN. The IRS has not yet announced the official 2027 PTIN fee or exact opening date. Apply only through the official IRS PTIN system⁠ irs.gov +3 Team reminder: Each paid preparer must have their own valid PTIN; PTINs cannot be shared.

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