Asked by: Jamie Champagne
A Schedule C is for the reporting of business income and or losses, whereas a Schedule E is used to report rental income and or losses. The income that is earned that is reflected on your Schedule C is subject to self-employment taxes, whereas the income reflected on your Schedule E is not.
Is Schedule C or E better?
Generally, Schedule E should be used to report rental income/loss. According to the IRS: “Generally, Schedule C is used when you provide substantial services [i.e. hotel like services] in conjunction with the property or the rental is part of a trade or business as a real estate dealer.”
What is the difference between Schedule C and SE?
The net income information on Schedule C is used to determine the amount of self-employment tax you owe (for Social Security and Medicare taxes). Schedule SE is used to calculate the self-employment tax amount.
Can I put rental income on a Schedule C?
If you meet the qualifications to be considered a real estate professional, your rental income is not considered to be passive, and can be reported onto a Schedule C. On the Schedule C, you should report your rental income and any relating expenses or deductions.
Can I claim rental property on Schedule C?
Real Estate Rentals
If you provide substantial services that are primarily for your tenant’s convenience, report your income and expenses on Schedule C (Form 1040), Profit or Loss From Business (Sole Proprietorship).
What is Schedule C used for?
More In Forms and Instructions
Use Schedule C (Form 1040) to report income or loss from a business you operated or a profession you practiced as a sole proprietor. An activity qualifies as a business if: Your primary purpose for engaging in the activity is for income or profit.
Can I use a Schedule C for an LLC?
An LLC Schedule C should be used by a single-member LLC when filing business taxes as a sole proprietor. Sole proprietors must also use a Schedule C when filing taxes. If you run your own business, you’ll generally need to complete an IRS Schedule C to account for your profits and losses.