# New Standard Deduction for Schedule C?



## Null (Oct 6, 2015)

I can't find any lay explanation of the Trump tax plan effects on Schedule C. I don't think it will affect me much since my deductions grossly exceed any applicable standard so I need to itemize regardless.

I got married in 2017. We'll likely be filing jointly for 2018. My thought is to have the wife sign up for U/L, have her do a couple rides to have self employment income so she can then deduct the standard deduction for a schedule C. I will be itemizing my sched C.

Would this work or Ami missing an elephant t in the room?


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## Older Chauffeur (Oct 16, 2014)

The choice of standard deduction or itemized deductions doesn't apply to Schedule C, on which you list your income and expenses ( standard mileage rate or actual expenses, cell phone bills, etc) from your business. Then the profit or loss is added to or deducted from your other income. Then you choose whether to use the standard deduction or itemized deductions like mortgage interest, medical expenses, etc on Schedule A.

Disclosure: I'm not a tax professional. You might want to try a tax software program like TurboTax. Make sure it includes Schedule C. Their CD Deluxe version is available at Costco for $39.86 right now; similar price at other retailers.


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## Mars Troll Number 4 (Oct 30, 2015)

On 2017 i'm going to take the standard deduction,

with about $15,000 in business deductions on schedule C.

Make sure your not getting the 2 confused.

Schedule C is not he same as itemized deductions.


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## Null (Oct 6, 2015)

Older Chauffeur said:


> The choice of standard deduction or itemized deductions doesn't apply to Schedule C, on which you list your income and expenses ( standard mileage rate or actual expenses, cell phone bills, etc) from your business. Then the profit or loss is added to or deducted from your other income. Then you choose whether to use the standard deduction or itemized deductions like mortgage interest, medical expenses, etc on Schedule A.
> 
> Disclosure: I'm not a tax professional. You might want to try a tax software program like TurboTax. Make sure it includes Schedule C. Their CD Deluxe version is available at Costco for $39.86 right now; similar price at other retailers.


I'm referring to the trump tax plan changes. There's a standard deduction that can be applied to those with schedule c income. My understanding anyway. But I've only been reading garbage articles on the subject that don't seem authoritative.


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## Fuzzyelvis (Dec 7, 2014)

Null said:


> I'm referring to the trump tax plan changes. There's a standard deduction that can be applied to those with schedule c income. My understanding anyway. But I've only been reading garbage articles on the subject that don't seem authoritative.


None of that matters until next year.


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## Null (Oct 6, 2015)

Fuzzyelvis said:


> None of that matters until next year.


Right.... I'm talking about next year....


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## Older Chauffeur (Oct 16, 2014)

Same answer; the $12,000 standard deduction per person doesn't go on Schedule C. What you may be thinking of is the small business 20% deduction if you qualify. It's not as simple as taking a deduction for mileage or cell phones. You need to set up an S Corp or LLC.
https://www.cnbc.com/2018/01/09/how-to-know-whether-your-business-qualifies-for-that-20-percent-tax-break.html?__source=sharebar|twitter&par=


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## Null (Oct 6, 2015)

Older Chauffeur said:


> Same answer; the $12,000 standard deduction per person doesn't go on Schedule C. What you may be thinking of is the small business 20% deduction if you qualify.
> https://www.cnbc.com/2018/01/09/how...k.html?__source=sharebar|twitter&par=sharebar


I'm trying to find where I saw it, but I was under the impression that there was a change regarding schedule Cs, you could either report revenues and itemized costs OR a standard amount. It was effectively a standard deduction on the schedule c, in lieu of the itemized expenses the schedule c normally requires.

I'm NOT confusing the normal standard deduction, etc. However, I may be confusing the applicability/scope of tax changes regarding the Y2017 tax year.

The goal being, if the wife can do 1 ride and take such a deduction, that deduction should kick down our joint AGI. Really though, I suppose this could be any self employment income so would probably be too broken a deduction for the IRS to allow it. Then again, they let us deduct .54/mi.


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## UberTaxPro (Oct 3, 2014)

Older Chauffeur said:


> Same answer; the $12,000 standard deduction per person doesn't go on Schedule C. What you may be thinking of is the small business 20% deduction if you qualify. It's not as simple as taking a deduction for mileage or cell phones. You need to set up an S Corp or LLC.
> https://www.cnbc.com/2018/01/09/how-to-know-whether-your-business-qualifies-for-that-20-percent-tax-break.html?__source=sharebar|twitter&par=


The new section 199-A (20% deduction)applies if you operate your business as a *sole proprietorship, partnership, or S corporation*. LLC's can qualify if they elect to be taxed as one of those entities.



Null said:


> I'm trying to find where I saw it, but I was under the impression that there was a change regarding schedule Cs, you could either report revenues and itemized costs OR a standard amount. It was effectively a standard deduction on the schedule c, in lieu of the itemized expenses the schedule c normally requires.
> 
> I'm NOT confusing the normal standard deduction, etc. However, I may be confusing the applicability/scope of tax changes regarding the Y2017 tax year.
> 
> The goal being, if the wife can do 1 ride and take such a deduction, that deduction should kick down our joint AGI. Really though, I suppose this could be any self employment income so would probably be too broken a deduction for the IRS to allow it. Then again, they let us deduct .54/mi.


There isn't any specific schedule c changes like reporting revenues and itemized costs or a standard amount like your thinking. "Girl Directions" HAHAHAHA


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## Older Chauffeur (Oct 16, 2014)

UberTaxPro said:


> The new section 199-A (20% deduction)applies if you operate your business as a *sole proprietorship, partnership, or S corporation*. LLC's can qualify if they elect to be taxed as one of those entities.
> 
> There isn't any specific schedule c changes like reporting revenues and itemized costs or a standard amount like your thinking. "Girl Directions" HAHAHAHA


Thanks for the clarification. The article seemed to indicate only the two ways to go.
Also, I wonder how the IRS would view Null having his wife do one trip or very few trips to be able claim self-employment losses. Don't you have to show a commitment to operating the business in a manner consistent with turning a profit?


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## UberTaxPro (Oct 3, 2014)

Older Chauffeur said:


> Thanks for the clarification. The article seemed to indicate only the two ways to go.
> Also, I wonder how the IRS would view Null having his wife do one trip or very few trips to be able claim self-employment losses. Don't you have to show a commitment to operating the business in a manner consistent with turning a profit?


That issue would come up if the IRS suspected the Uber driving was a "hobby" and not a business. It's a good point you bring up because schedule c abuse (writing off W-2 income with falsified schedule c deductions) is an area the IRS has promised to crack down on. That being said, as long as Null can back up the losses with legitimate business records he should be fine. I haven't heard of any cases yet where driving for Uber has been determined to be a "hobby". He should be aware however that taxpayers with schedule c losses may face more scrutiny in the coming years. I personally know of some taxpreparers that have received warning letters from the IRS because of the large amount of clients they have with schedule c losses. If the losses are legit, take advantage of the law, just be prepared to back it up.


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