Wife has a small home business how do I enter that info?

SteveL
SteveL Member Posts: 1 Newcomer
in Credits/Deductions

As subject says, wife has a very small home business that she does pay quarterly sales tax for on her sales. She has $2,068 in expenses, and $2,037 in sales. How do I enter this on FreeTaxUSA?

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Answers

  • MatthewD
    MatthewD FreeTaxUSA Admin, FreeTaxUSA Agent Posts: 901 image
    Hello,

    To report your wife's home business income and expenses, you'll need to complete a Schedule C in FreeTaxUSA. Here's how to enter it:

    1. Go to the Income section of your return
    2. Look for Self-Employment Income or Business Income (Schedule C)
    3. Click to add or edit the Schedule C
    4. Enter the business information (business name, description, etc.)
    5. Report the $2,037 in gross receipts/sales
    6. Enter the $2,068 in business expenses in the appropriate expense categories

    The Schedule C will calculate your net business income (or loss, in this case, since expenses slightly exceed income). This will flow to your Form 1040 and also calculate any self-employment tax that may be due.

    Since your wife is paying quarterly sales tax, that's separate from federal income tax reporting—If the tax was included in her gross business income, the sales tax she collects and remits to the state is included as a Tax expense in the Common Expenses section of the Schedule C. Otherwise, if it was not included in gross business income, she does not report it anywhere.

    If you need help identifying which expense categories to use for the $2,068, the Schedule C section will walk you through common categories like supplies, advertising, office expenses, etc.

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