Question

Which of the following are types of expenses that can be claimed on Schedule C?

1) Trade or Business Expenses
2) Rental and Royalty Expenses
3) Flow-Through Entities
4) Capital Losses
5) Health Insurance Deduction by Self-Employed Taxpayers
6) Penalty for Early Withdrawal of Savings
7) Self-Employed Tax Deduction ('SE Tax')
8) Alimony Payments
9) Qualified Education Loan Interest (Student Loan Interest)

Answer 1

Schedule C is for reporting Trade or Business Expenses, Health Insurance Deduction for self-employed individuals, and the Self-Employed Tax Deduction. Other expenses like rental, capital losses, or personal expenses such as alimony payments do not belong on Schedule C.

Step-by-step explanation:

On Schedule C, types of expenses that can be claimed include Trade or Business Expenses, Health Insurance Deduction by Self-Employed Taxpayers, and the Self-Employed Tax Deduction ('SE Tax').

Trade or Business Expenses cover a broad range of costs necessary for the operation of your business. The Health Insurance Deduction allows self-employed individuals to deduct the cost of health insurance for themselves and their family.

Lastly, the Self-Employed Tax Deduction relates to Social Security and Medicare taxes that self-employed individuals must pay.

Rental and Royalty Expenses would not be filed on Schedule C unless they are directly related to the business activity. Similarly, Capital Losses are reported on Schedule D, not Schedule C.

The penalty for early withdrawal of savings, alimony payments, and qualified education loan interest (student loan interest) are personal expenses and do not relate to business expenses eligible for deduction on Schedule C.