If you selected “Sole proprietor” as your tax classification, you’ll notice that Found automatically created a “Schedule C” for you within Tax documents. Sole proprietors need to attach an extra form to their tax return called the Schedule C, Profit or Loss From Business. This form should list your business income and expenses.
One of the primary reasons the IRS asks you to fill out this form is so they can see your business profit. Your business profit is your business income, minus your business expenses. You’re only taxed on your business profit, so when you’re reporting all of your different kinds of income on your tax return, your business profit is what the IRS actually needs to know in order to figure out how much you owe in taxes
That’s why it’s so important to track your business expenses as a sole proprietor: Each business expense lowers your profit, which helps you pay less in taxes!
If you file taxes with a tax preparer, you can give them your Found Schedule C so they can use it to prepare your tax return. If you’re filing with a tax filing software or by hand, you can reference your Found Schedule C when you’re filling out your tax return.
If your business is taxed as a corporation, Found provides a Form 1120 for your use.
