Can I file Schedule C as self-employed without a registered business license?

So if I do Uber driving on weekends, can I use Schedule C too? I made like $6K last year but wasn't sure if I needed a business license first. Also, can I deduct car payments or just mileage?

Yes, Uber driving is definitely self-employment work that should be reported on Schedule C! You don't need a business license to drive for Uber and report the income properly. For your vehicle expenses, you typically have to choose between the standard mileage deduction OR actual expenses (which includes a portion of car payments, insurance, maintenance, etc.). Most Uber drivers find the standard mileage rate more beneficial and much simpler to calculate. Just be sure to keep a detailed mileage log showing business miles driven.

Does that service actually help determine which expenses are legitimate? I do photography on the side and I'm never sure if things like my cell phone bill or internet are partly deductible or if that's pushing it too far.

I'm skeptical about tax tools claiming to know what's deductible. Does it actually check if your home office is exclusively used for business? Seems like it would just believe whatever you tell it.

It actually does help identify legitimate expenses - it analyzes your receipts and categorizes them based on IRS guidelines. For things like cell phones and internet, it helps you calculate the business percentage based on your usage patterns. It was really clear about when I could claim partial expenses. For home offices, it asks specific questions about exclusive use and walks you through the requirements, including helping you measure and calculate the correct percentage of your home. It's not just taking your word for it - it guides you through the proper documentation process the IRS would expect in case of an audit.

Wait how does that even work? The IRS phone system is notoriously impossible to get through. Is this like paying someone to wait on hold for you?

Sounds like a scam to me. Nobody can magically get through to the IRS faster than the regular phone system allows. They probably just charge you money to wait on the same hold line everyone else uses.

It's not someone waiting on hold for you - they actually use a system that navigates the IRS phone tree and secures your place in line, then calls you when an agent is about to be connected. It's completely legitimate and works with the existing IRS phone system. They essentially use technology to monitor hold times and call patterns to maximize your chances of getting through. I was skeptical too until I tried it and got connected to an actual IRS agent after months of failed attempts. The time I saved was worth it considering I was about to miss a deadline for responding to the IRS notice.

Does this sole proprietor thing apply if I'm still working a regular job? I make custom furniture on weekends (about $12K last year) but also have a full time W-2 job. Do I need to register a business name or anything?

Yes, the sole proprietor classification absolutely applies even if you have a regular W-2 job. Many people have both types of income. You're essentially wearing two hats - employee at your main job and business owner for your furniture work. You don't need to register a business name if you're operating under your personal name. If you want to use a different business name (like "Smith's Custom Furniture"), you might need to file a DBA ("doing business as") form with your county, but that's still not required for tax purposes - just for legal name usage.

I used FreeTaxUSA for my side gig last year and it worked great. WAY cheaper than TurboTax and handled my Schedule C perfectly. They walked me through all the business expense categories and even explained what qualified. Fed return was free and state was like $15.

This is really helpful! I'm in a similar boat with freelance writing - made about $4,200 last year but was nervous about filing Schedule C since I don't have any official business setup. The self-employment tax part is news to me though - is that calculated automatically when you file Schedule C, or do you need to fill out additional forms? Also, for the home office deduction, do you need to have a completely separate room or can it be like a corner of your bedroom that you only use for work?

The self-employment tax gets calculated automatically when you file Schedule C - it flows to Schedule SE (Self-Employment Tax) which is included with your regular tax return. So you don't need to worry about separate forms, the tax software handles it all together. For the home office deduction, it needs to be a space used "regularly and exclusively" for business. A corner of your bedroom can qualify, but it has to be ONLY used for work - so if you sometimes watch TV or do personal stuff in that same corner, it doesn't qualify. The IRS is pretty strict about the "exclusive use" requirement. If you have a dedicated desk area that's only for writing work, you can measure that specific area and calculate the percentage of your total home space it represents. With $4,200 in freelance income, you'll definitely want to take advantage of any legitimate business deductions to reduce your self-employment tax burden!

This is such great advice! I'm just starting out with freelance social media management and was terrified about the tax implications. The quarterly estimated taxes part is something I hadn't even thought about - do you have a rule of thumb for how much to set aside from each payment? I've been putting about 25% in a separate account but wasn't sure if that's enough to cover both regular income tax and the self-employment tax you mentioned. Also, for the business documentation spreadsheet idea - do you include partial expenses like when you buy something that's used for both personal and business? Like if I buy a new phone that I use 60% for client work, how do you document that split?