Overview

There is little doubt in the minds of many observers that the world of work—an environment in which a legion of wage earners commute to an employer’s office or worksite to toil from 9 to 5—is changing. The changing nature of work for many taxpayers is likely to have an effect on tax preparers’ need to prepare Schedule C.

The gig economy, an economy characterized by multiple types of alternative work arrangements including independent contractors, online platform workers, contract firm workers, on-call workers, and temporary workers, engages 36% of U.S. workers. 

Whether the strength of the gig economy is due to the flexibility and freedom it affords, the fewer limits on income it exerts compared to being a wage earner or results from some other advantage it offers, it seems clear that the gig economy is here to stay and intent on growing larger with each year. With that growth is the likely growth of tax preparers’ need to be familiar with preparation of Schedule C.

Learning objectives

Upon completion of this course, you should be able to:

• Identify the types of income reported on Schedule C;
• Determine proprietors’ installment sale income when using the installment method;
• Describe the business expenses deductible on Schedule C;
• List the differences between a business and a hobby; and
• Apply the rules governing the deduction for business use of a taxpayer’s home.