US Schedule C and SE Computation Skill v2.0

Section 1 — Quick Reference

Pipeline Position

Bank statement / source data
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us-sole-prop-bookkeeping (classifies every transaction into a Schedule C line)
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us-schedule-c-and-se-computation (THIS SKILL — aggregates, runs Form 8829, computes net profit, computes SE tax)
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us-form-1040-self-employed-positions (QBI, SE health insurance, retirement, OBBBA personal deductions)
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us-quarterly-estimated-tax (safe harbor for following year)

Tax year: 2025. Currency date: April 2026.

Self-Employment Tax Core Figures (TY2025)

Figure	Value	Source
Net SE earnings adjustment factor	92.35%	IRC 1402(a)(12)
OASDI (Social Security) rate	12.4%	IRC 1401(a)
Medicare rate	2.9%	IRC 1401(b)(1)
Combined SE tax rate	15.3%	IRC 1401(a) + 1401(b)(1)
Social Security wage base	$176,100	SSA October 2024 announcement
Additional Medicare Tax rate	0.9%	IRC 1401(b)(2)
Additional Medicare Tax threshold (single, HoH, QSS)	$200,000	IRC 3101(b)(2)(C); NOT indexed
Additional Medicare Tax threshold (MFJ)	$250,000	IRC 3101(b)(2)(A); NOT indexed
Additional Medicare Tax threshold (MFS)	$125,000	IRC 3101(b)(2)(B); NOT indexed
Minimum net SE earnings to trigger SE tax	$400	IRC 1402(b)(2); NOT indexed
Deductible portion of SE tax	50%	IRC 164(f)

Schedule SE Optional Methods (TY2025)

Figure	Value
Nonfarm optional method max SE earnings	$7,320
Nonfarm gross income threshold	$10,380 minimum gross
Nonfarm profit threshold	< $7,320 net AND < 72.189% of gross
5-year lifetime limit	Yes

Home Office Methods

Method	Deduction	Carryover	Depreciation	1250 Recapture
Simplified	$5/sq ft x min(sq ft, 300) = max $1,500	NO	NO	NO
Actual (Form 8829)	Actual expenses x business %	YES (indefinite)	YES (39-year SL)	YES

Both subject to 280A(c)(5) gross income limitation (deduction cannot exceed Schedule C Line 29 tentative profit).

Schedule C Computation Structure

Line	Description
1	Gross receipts or sales
2	Returns and allowances
3	Line 1 minus Line 2
4	Cost of goods sold (Part III)
5	Gross profit (Line 3 minus Line 4)
6	Other income
7	Gross income (Line 5 plus Line 6)
8-27b	Expense lines (from bookkeeping skill)
28	Total expenses (sum of 8-27b)
29	Tentative profit (Line 7 minus Line 28)
30	Home office deduction (Form 8829 or simplified)
31	Net profit or loss (Line 29 minus Line 30)
32	At-risk indicator (32a all at risk / 32b Form 6198)

Schedule SE Part I Structure

Line	Description
2	Net profit from Schedule C Line 31
4a	Line 3 x 92.35%
6	Net SE earnings subject to tax
7	$176,100 (2025 SS wage base)
8d	W-2 SS wages (if any)
9	Line 7 minus Line 8d (remaining SS base)
10	Smaller of Line 6 or Line 9 x 12.4% (SS portion)
11	Line 6 x 2.9% (Medicare portion)
12	SE tax (Line 10 + Line 11)
13	Deductible half (Line 12 x 50%) flows to Schedule 1 line 15

Conservative Defaults

Ambiguity	Conservative Default
92.35% adjustment forgotten	Apply it; defensive check
2025 SS wage base unknown	Use $176,100 (verified)
W-2 wage coordination unknown	Assume no W-2 (full SS base available); flag
Filing status unknown	Single (highest Additional Medicare Tax threshold risk)
Form 8829 prior-year carryover unknown	Assume zero; flag
Home depreciation basis undocumented	$0 depreciation; flag 1250 recapture risk
Actual vs simplified home office method unclear	Ask; do not assume
At-risk status	Yes (Line 32a) unless evidence to contrary
Net loss large enough for NOL	Refuse (R-COMP-NOL)
Gross receipts < 1099 totals	Flag — IRS computer match risk

Red Flag Thresholds

Flag	Threshold
Schedule C Line 31 >= $200,000	Approaches Additional Medicare Tax threshold (single)
Schedule C Line 31 <= -$5,000	Loss territory; check at-risk and hobby loss
Form 8829 deduction >= $5,000	Material; substantiation review
Home depreciation taken (actual method)	1250 recapture risk on future home sale
Home office limited by 280A(c)(5)	Carryover treatment verification
Net SE earnings near $176,100 wage base	Verify W-2 coordination
Combined SE + W-2 >= Additional Medicare Tax threshold	Form 8959 required
Gross receipts < 1099 totals	IRS computer match risk

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Section 2 — Required Inputs + Refusal Catalogue

Required Inputs

Upstream prerequisite: This skill requires the us-sole-prop-bookkeeping working paper with classified Schedule C line totals. If no working paper exists, run bookkeeping first or accept user-provided totals (flagged as unvalidated).

1. Schedule C line totals — from bookkeeping working paper (Lines 1 through 27b)
2. Home office method — simplified or actual (Form 8829)
3. Home office square footage — office area and total home area
4. Home expenses (if actual method) — mortgage interest, taxes, insurance, utilities, repairs
5. Home depreciation data (if actual) — adjusted basis, FMV at conversion, land value, date placed in service
6. Prior-year Form 8829 carryovers — lines 43 and 44
7. W-2 wages (if any) — Box 3 SS wages for SE tax coordination
8. Filing status — for Additional Medicare Tax threshold
9. 1099-K, 1099-NEC, 1099-MISC received — for gross receipts cross-check
10. At-risk status — all at risk or Form 6198 needed

Refusal Catalogue

Code	Situation	Action
R-COMP-NOL	Net operating loss generated	Stop — 172 analysis required; outside scope
R-COMP-ATRISK	At-risk limitation may apply (Form 6198)	Stop — 465 analysis required
R-COMP-FORM8959-COMPLEX	Additional Medicare Tax with complex W-2 coordination	Flag — compute basic liability; reviewer verifies withholding
R-COMP-FARM	Farm income present	Stop — Schedule F, not Schedule C
R-COMP-CHURCH	Church employee income	Stop — 1402(j) special rules; specialist needed
R-COMP-PRIORYEAR	No prior-year return for carryover verification	Soft stop — proceed with zero carryover assumption; flag

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Section 3 — Transaction Pattern Library

3.1 Income Patterns (US Banks)

#	Narration Pattern	Schedule C Line	Notes
I-01	ACH CREDIT [client name] / DIRECT DEP [client]	Line 1 — Gross receipts	Standard ACH deposit from client
I-02	WIRE TRANSFER FROM [client] / INCOMING WIRE	Line 1 — Gross receipts	Wire transfer from client
I-03	ZELLE FROM [client] / ZELLE PAYMENT	Line 1 — Gross receipts	Zelle instant payment
I-04	STRIPE TRANSFER / STRIPE PAYOUT	Line 1 — Gross receipts (gross up)	Stripe payout; gross up for processing fees (Line 27b)
I-05	SQUARE INC / SQ *[business] / SQUARE PAYOUT	Line 1 — Gross receipts (gross up)	Square payout; gross up for fees
I-06	PAYPAL TRANSFER / PAYPAL INST XFER	Line 1 — Gross receipts (gross up)	PayPal payout; gross up
I-07	VENMO CASHOUT / VENMO PAYMENT	Line 1 — Gross receipts	Venmo business payment
I-08	GUSTO PAYMENT / BILL.COM PAYMENT	Line 1 — Gross receipts	Payment platform deposit
I-09	CHECK DEPOSIT / MOBILE CHECK DEP	Line 1 — Gross receipts	Client check deposited
I-10	IRS TREAS 310 TAX REF / IRS REFUND	NOT income — tax refund	IRS refund; exclude from Line 1
I-11	INTEREST PAYMENT / INTEREST EARNED	Line 6 — Other income (if business acct)	Business account interest
I-12	TRANSFER FROM [own account] / ONLINE TRANSFER	EXCLUDE — owner contribution	Not income; capital contribution

3.2 Expense Patterns (US Banks)

#	Narration Pattern	Schedule C Line	Notes
E-01	GOOGLE ADS / FACEBOOK ADS / META ADS	Line 8 — Advertising	Marketing spend
E-02	GEICO / STATE FARM / PROGRESSIVE (vehicle)	Line 9 — Car/truck expenses	If standard mileage: not deductible separately
E-03	[Subcontractor name] ACH / 1099 CONTRACTOR	Line 11 — Contract labor	1099-NEC issuance may be required
E-04	APPLE / DELL / BEST BUY (equipment)	Line 13 — Depreciation/179	Capital asset; classify via 179 or bonus
E-05	HISCOX / NEXT INSURANCE / THE HARTFORD	Line 15 — Insurance	Business liability/E&O insurance
E-06	LEGALZOOM / [CPA name] / [attorney name]	Line 17 — Legal and professional	Tax prep, legal services
E-07	STAPLES / OFFICE DEPOT / AMAZON OFFICE	Line 18 — Office expense	Office supplies and equipment
E-08	WEWORK / REGUS / INDUSTRIOUS	Line 20b — Other business property	Coworking space
E-09	AMAZON / AMAZON.COM (supplies)	Line 22 — Supplies	Non-office supplies for business
E-10	UNITED AIRLINES / DELTA / AMERICAN AIRLINES / SOUTHWEST	Line 24a — Travel	Business flights; document purpose
E-11	MARRIOTT / HILTON / HYATT / AIRBNB	Line 24a — Travel	Business accommodation
E-12	UBER / LYFT / TAXI	Line 24a — Travel (ground)	Business ground transport
E-13	RESTAURANT / DOORDASH / GRUBHUB (business meal)	Line 24b — Meals (50%)	Business meals; 50% deductible
E-14	ADOBE / MICROSOFT / GITHUB / AWS	Line 27b — Other expenses	Software subscriptions
E-15	STRIPE FEE / PAYPAL FEE / SQUARE FEE	Line 27b — Other expenses	Payment processing fees
E-16	CHASE MONTHLY FEE / WELLS FARGO FEE / BOA FEE	Line 27b — Other expenses	Bank account fees (business)
E-17	EFTPS TAX PMT / IRS USATAXPYMT	NOT deductible — tax payment	Estimated tax payment; credit not expense
E-18	TRANSFER TO [personal] / OWNER DRAW	NOT deductible — personal	Owner withdrawal
E-19	EXXON / SHELL / CHEVRON / BP (fuel)	Line 9 or Line 27b	If using actual vehicle method; not if standard mileage
E-20	AT&T / VERIZON / T-MOBILE / XFINITY / SPECTRUM	Line 25 — Utilities (or 8829)	If home office: flows through Form 8829; otherwise Line 25

3.3 US Bank Fees (Deductible as Line 27b)

Pattern	Treatment	Notes
CHASE, JPMORGAN CHASE	Deductible (Line 27b) for business account fees	Largest US bank
WELLS FARGO	Deductible (Line 27b) for business account fees
BANK OF AMERICA, BOFA	Deductible (Line 27b) for business account fees
CITIBANK	Deductible (Line 27b) for business account fees
US BANK	Deductible (Line 27b) for business account fees
PNC	Deductible (Line 27b) for business account fees
CAPITAL ONE	Deductible (Line 27b) for business account fees
SVB, SILICON VALLEY	Deductible (Line 27b) for business account fees	Tech banking
MERCURY	Deductible (Line 27b) for business account fees	Startup banking
RELAY, NOVO, BLUEVINE	Deductible (Line 27b) for business account fees	SMB digital banks
MONTHLY SERVICE FEE, MAINT FEE	Deductible (Line 27b)	Account maintenance
WIRE FEE, ACH FEE	Deductible (Line 27b)	Transaction fees

3.4 Internal Transfers and Exclusions

Pattern	Treatment	Notes
TRANSFER FROM SAVINGS, TRANSFER FROM CHECKING	EXCLUDE	Internal movement
OWNER CONTRIBUTION, PERSONAL DEPOSIT	EXCLUDE	Capital contribution, not income
LOAN PROCEEDS, SBA LOAN	EXCLUDE	Debt, not income
LOAN PAYMENT, PRINCIPAL PAYMENT	EXCLUDE (interest portion may be deductible)	Separate interest vs principal
IRS TREAS 310, STATE TAX REFUND	EXCLUDE	Tax refunds
CREDIT CARD PAYMENT	EXCLUDE	Paying off CC; expenses on the CC are already classified

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Section 4 — Worked Examples

Example 1 — Chase (Austin TX, UX Designer — Actual Home Office)

Bank: Chase Business Checking Client: Maria Hernandez, freelance UX designer, single, Austin TX, sole prop

Date;Description;Debit;Credit;Balance
01/15/2025;ACH CREDIT TECH STARTUP INC;;12,500.00;
01/20/2025;CHASE MONTHLY FEE;15.00;;
02/05/2025;STRIPE TRANSFER;;8,750.00;
02/15/2025;ADOBE CREATIVE CLOUD;54.99;;
03/01/2025;ZELLE FROM DESIGN CLIENT;;3,200.00;
03/15/2025;EFTPS TAX PMT;3,500.00;;
04/01/2025;WEWORK AUSTIN;299.00;;
05/10/2025;UNITED AIRLINES;487.00;;
06/01/2025;MARRIOTT HOTEL;342.00;;
07/15/2025;HISCOX INSURANCE;60.00;;

Schedule C (from bookkeeping totals, annualised):

• Line 1 (Gross receipts): $87,500
• Line 8 (Advertising): $480
• Line 9 (Car — 4,200 miles x $0.70): $2,940
• Line 11 (Contract labor): $5,200
• Line 13 (Depreciation/179 — MacBook): $3,499
• Line 15 (Insurance): $720
• Line 17 (Legal/professional): $1,150
• Line 18 (Office expense): $2,134
• Line 20b (Coworking): $3,588
• Line 22 (Supplies): $246
• Line 24a (Travel): $4,287
• Line 24b (Meals at 50%): $920
• Line 27b (Other — software, fees, bank): $4,892
• Line 28 (Total expenses): $30,056
• Line 29 (Tentative profit): $57,444

Form 8829 (actual method): 150 sq ft office / 1,200 sq ft home = 12.5% Indirect expenses: mortgage $14,200 + taxes $7,800 + insurance $1,440 + utilities $3,600 = $27,040 Business portion: $27,040 x 12.5% = $3,380 Depreciation: ($385,000 - $80,000 land) x 12.5% x 2.564% = $977 Total home office: $3,380 + $977 = $4,357

280A(c)(5) check: $4,357 < $57,444 — no limitation.

• Line 30: $4,357
• Line 31 (Net profit): $53,087
• Line 32: 32a (all at risk)

Schedule SE:

• Line 4a: $53,087 x 92.35% = $49,026
• Line 10: $49,026 x 12.4% = $6,079 (SS)
• Line 11: $49,026 x 2.9% = $1,422 (Medicare)
• Line 12: $7,501 (SE tax)
• Line 13: $3,750 (deductible half)
• Additional Medicare Tax: $49,026 < $200,000 — not applicable

Example 2 — Wells Fargo (Denver CO, Consultant — Simplified Home Office)

Bank: Wells Fargo Business Client: James Park, management consultant, Denver, single

Gross receipts: $142,000. Total expenses (Lines 8-27b): $38,500. Tentative profit (Line 29): $103,500.

Simplified home office: 200 sq ft x $5 = $1,000. Under $1,500 max. 280A(c)(5) check: $1,000 < $103,500 — no limitation.

• Line 30: $1,000
• Line 31: $102,500

SE tax: $102,500 x 92.35% = $94,659 x 15.3% = $14,483 Deductible half: $7,241 Additional Medicare Tax: $94,659 < $200,000 — not applicable.

Example 3 — Bank of America (San Francisco, Developer — W-2 + SE)

Bank: BOA Business Checking Client: Priya Patel, software developer, SF, also W-2 from part-time job

Schedule C net profit: $85,000. W-2 SS wages (Box 3): $120,000.

SE computation:

• Line 4a: $85,000 x 92.35% = $78,498
• Line 8d: $120,000 (W-2 SS wages)
• Line 9: $176,100 - $120,000 = $56,100 (remaining SS base)
• Line 10: smaller of $78,498 or $56,100 = $56,100 x 12.4% = $6,956 (SS)
• Line 11: $78,498 x 2.9% = $2,276 (Medicare — no cap)
• Line 12: $9,232

Additional Medicare Tax check: $120,000 + $78,498 = $198,498. Under $200,000 (single). Not applicable.

Flag: Close to Additional Medicare Tax threshold — monitor if income increases.

Example 4 — Mercury (Remote, Net Loss Scenario)

Bank: Mercury Business Client: Alex Chen, first-year startup founder

Schedule C net profit: ($12,000) — net loss. SE tax: $0 (no SE tax on a loss). Loss flows to Schedule 1 line 3 as ($12,000). Reduces AGI.

Flag: Check hobby loss (3+ year loss streak). Check at-risk (Line 32a confirmed). If loss creates NOL: R-COMP-NOL fires.

Example 5 — Chase (NYC, High Earner — Additional Medicare Tax)

Bank: Chase Business Client: Sarah Kim, consulting, NYC, single

Schedule C net profit: $280,000. SE: $280,000 x 92.35% = $258,580. SS portion: min($258,580, $176,100) x 12.4% = $21,836 Medicare: $258,580 x 2.9% = $7,499 SE tax: $29,335. Deductible half: $14,668.

Additional Medicare Tax: $258,580 > $200,000. Excess: $58,580 x 0.9% = $527 (Form 8959).

Example 6 — Relay (Austin, 280A Gross Income Limitation)

Bank: Relay Business Banking Client: Tom Rivera, photographer, Austin

Gross income (Line 7): $18,000. Expenses (Line 28): $16,500. Tentative profit (Line 29): $1,500. Form 8829 actual method tentative deduction: $4,200.

280A(c)(5) limitation: $4,200 > $1,500. Cap deduction at $1,500. Carryover: $4,200 - $1,500 = $2,700 carried to next year (Form 8829 lines 43-44).

Line 30: $1,500. Line 31: $0. SE tax: $0 ($0 < $400 minimum).

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Section 5 — Tier 1 Rules (Apply Directly)

T1-US-SE-1 — Always apply the 92.35% adjustment Net SE earnings = Schedule C net profit x 92.35%. This is the 1402(a)(12) adjustment. Never compute SE tax on the full Schedule C net profit.

T1-US-SE-2 — SS wage base coordination with W-2 If the taxpayer has W-2 wages, subtract W-2 Box 3 SS wages from $176,100 to get the remaining SS base for SE. If W-2 wages already exceed $176,100, the SS portion of SE tax is $0 — only Medicare applies.

T1-US-SE-3 — Additional Medicare Tax is on Form 8959, NOT Schedule SE The 0.9% Additional Medicare Tax is computed on Form 8959, not blended into Schedule SE. Schedule SE Line 11 uses 2.9% only. Never include 0.9% in Schedule SE.

T1-US-SE-4 — Minimum $400 threshold If net SE earnings (after 92.35% adjustment) are less than $400, no SE tax is due. Do not compute SE tax on sub-$400 amounts.

T1-US-SE-5 — Home office deduction cannot exceed Line 29 The 280A(c)(5) gross income limitation caps the home office deduction at the tentative profit. Excess carries over under actual method; is lost under simplified method.

T1-US-SE-6 — Deductible half of SE tax is NOT a Schedule C expense The deductible half (Schedule SE Line 13) flows to Schedule 1 line 15 as an above-the-line deduction. It does NOT reduce Schedule C net profit and does NOT reduce QBI.

T1-US-SE-7 — EFTPS / estimated tax payments are credits, not expenses Quarterly estimated tax payments made via EFTPS are credits against the annual tax liability. Never include them as Schedule C expenses.

T1-US-SE-8 — 1250 recapture warning for actual home office depreciation Taking home depreciation creates 1250 recapture on future home sale. The 121 home sale exclusion does NOT shelter this. Flag prominently. Note: depreciation is "allowed or allowable" — skipping the deduction does not avoid recapture.

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Section 6 — Tier 2 Catalogue (Reviewer Judgement Required)

Code	Situation	Escalation Reason	Suggested Treatment
T2-US-SE-1	Simplified vs actual home office comparison	Both methods available each year; no lock-in	Present both calculations; reviewer confirms taxpayer preference
T2-US-SE-2	Vehicle actual vs standard mileage	Cannot switch from actual to standard on same vehicle	Flag — verify prior-year method for the vehicle
T2-US-SE-3	Hobby loss exposure (3+ year loss streak)	183 rebuttable presumption	Flag — do not refuse; reviewer assesses profit motive
T2-US-SE-4	At-risk status uncertain	Form 6198 may be required	Flag — if any nonrecourse debt or sheltered investment
T2-US-SE-5	SE optional method consideration	Low-income earner may want to "buy" SS credits	Skip unless taxpayer asks; present if near retirement
T2-US-SE-6	Home office depreciation: claim or skip	1250 recapture applies either way; claiming is usually better	Flag — reviewer should confirm taxpayer understands trade-off

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Section 7 — Excel Working Paper Template

US SCHEDULE C / SE WORKING PAPER (SOLE PROPRIETOR / SMLLC)
Taxpayer: _______________  SSN/EIN: _______________  TY: 2025

SECTION A — SCHEDULE C INCOME
                                            USD
Line 1 (Gross receipts):                  ___________
Line 2 (Returns and allowances):           ___________
Line 3 (Net receipts):                    ___________
Line 4 (COGS):                             ___________
Line 5 (Gross profit):                    ___________
Line 6 (Other income):                    ___________
Line 7 (Gross income):                    ___________

SECTION B — SCHEDULE C EXPENSES
Line 8 (Advertising):                     ___________
Line 9 (Car and truck):                   ___________
Line 11 (Contract labor):                 ___________
Line 13 (Depreciation/179):               ___________
Line 15 (Insurance):                      ___________
Line 17 (Legal and professional):          ___________
Line 18 (Office expense):                 ___________
Line 20b (Other business property):        ___________
Line 22 (Supplies):                        ___________
Line 24a (Travel):                         ___________
Line 24b (Meals at 50%):                  ___________
Line 25 (Utilities):                       ___________
Line 27b (Other expenses):                ___________
Line 28 (TOTAL EXPENSES):                 ___________

SECTION C — BOTTOM LINE
Line 29 (Tentative profit):               ___________
Line 30 (Home office):                    ___________
  Method: [ ] Simplified  [ ] Actual (Form 8829)
Line 31 (NET PROFIT OR LOSS):             ___________
Line 32: [ ] 32a (all at risk)  [ ] 32b (Form 6198)

SECTION D — FORM 8829 (IF ACTUAL METHOD)
Office sq ft: ___ / Total sq ft: ___ = Business %: ___
Indirect expenses (mortgage, tax, insurance, utilities): ___________
Business portion:                          ___________
Direct expenses:                           ___________
Depreciation:                              ___________
Prior-year carryover:                      ___________
Tentative deduction:                       ___________
280A(c)(5) limitation applied? [ ] No  [ ] Yes (capped at $___)
Carryover to next year:                    ___________
FORM 8829 DEDUCTION:                      ___________

SECTION E — SCHEDULE SE
Net SE earnings (Line 31 x 92.35%):       ___________
W-2 SS wages (if any):                    ___________
Remaining SS base:                         ___________
SS portion (12.4%):                        ___________
Medicare portion (2.9%):                   ___________
SE TAX (Line 12):                          ___________
Deductible half (Line 13):                ___________

SECTION F — ADDITIONAL MEDICARE TAX CHECK
Combined earned income (SE + W-2):         ___________
Filing status threshold:                   ___________
Excess (if any):                           ___________
Additional Medicare Tax (0.9%):            ___________
Form 8959 required? [ ] No  [ ] Yes

SECTION G — DOWNSTREAM OUTPUTS
Schedule 1 line 3 (business income):       ___________
Schedule 1 line 15 (deductible half SE):   ___________
Schedule 2 line 4 (SE tax):               ___________
Net SE earnings (for retirement calc):     ___________

SECTION H — REVIEWER FLAGS
[ ] Upstream bookkeeping working paper verified?
[ ] 92.35% adjustment applied?
[ ] SS wage base coordination correct (W-2)?
[ ] Additional Medicare Tax on Form 8959 (not SE)?
[ ] Home office 280A(c)(5) limitation checked?
[ ] Home depreciation 1250 recapture flagged?
[ ] $400 minimum SE threshold checked?
[ ] 1099 totals cross-checked with Line 1?
[ ] At-risk indicator stated (Line 32)?
[ ] EFTPS payments excluded from expenses?

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Section 8 — Bank Statement Reading Guide

Chase (JPMorgan Chase)

• Export: CSV/OFX from Chase Business Online → "Download account activity"
• Columns: Details,Posting Date,Description,Amount,Type,Balance,Check or Slip #
• Amount format: positive = credit, negative = debit (or vice versa depending on download type)
• Date: MM/DD/YYYY
• Credits: ACH CREDIT [sender], WIRE TYPE:WIRE IN [sender], ZELLE FROM [name]
• Debits: ACH DEBIT [payee], CHASE CREDIT CRD AUTOPAY, CHECKCARD [merchant]

Wells Fargo

• Export: CSV from Wells Fargo Business Online → "Download" → CSV
• Columns: Date,Amount,*,Check Number,Description
• Negative amount = debit; positive = credit
• Date: MM/DD/YYYY
• Credits: ACH CREDIT [sender], WIRE TRANSFER [sender], ONLINE TRANSFER FROM [acct]
• Debits: PURCHASE AUTHORIZED [merchant], BILL PAY [payee]

Bank of America

• Export: CSV from BOA Business Online → "Download Transactions"
• Columns: Date,Description,Amount,Running Bal.
• Negative = debit; positive = credit
• Credits: ACH CREDITS [sender], WIRE [sender]

Citibank

• Export: CSV from Citi Business Online
• Standard US format; Date,Description,Debit,Credit,Status

US Bank

• Export: CSV from USB Business Online
• Standard: Date,Transaction,Name,Memo,Amount

Mercury (Startup Banking)

• Export: CSV from Mercury dashboard → "Transactions" → "Export"
• Columns: Date,Description,Amount,Status,Bank Description,Note
• Clean format; positive = credit, negative = debit
• Stripe/PayPal payouts clearly labeled

Relay Financial

• Export: CSV from Relay dashboard
• Columns: Date,Description,Amount,Balance
• Positive = credit; negative = debit

Novo / Bluevine (SMB Digital)

• Export: CSV from dashboard
• Simple format; single amount column with sign

Square / Cash App for Business

• Settlements appear as SQ *[business name] or SQUARE INC deposits
• Gross-up required — Square deducts 2.6% + $0.10 before settlement

Stripe

• Payouts appear as STRIPE TRANSFER or STRIPE in bank statement
• Cross-reference with Stripe dashboard → Payouts for gross amounts and fees
• 1099-K issued by Stripe if > $600

PayPal

• Payouts appear as PAYPAL INST XFER or PAYPAL TRANSFER
• Cross-reference with PayPal activity → Reports for gross amounts
• 1099-K issued if > $600

Key US Banking Notes

• US banks use MM/DD/YYYY date format
• Amount sign conventions vary by bank and export format — always verify
• ACH (Automated Clearing House) is the standard inter-bank transfer
• Zelle is an instant payment system; appears as ZELLE FROM/TO [name]
• EFTPS (Electronic Federal Tax Payment System) payments are estimated tax — never an expense

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Section 9 — Onboarding Fallback

Upstream bookkeeping check:

"I need the bookkeeping classification to run first. Schedule C computation requires classified transaction totals from us-sole-prop-bookkeeping. Do you want me to run the bookkeeping skill on your transaction data first, or do you already have classified Schedule C line totals?"

Home office method:

"Do you use a home office for your business? If so, there are two methods: the simplified method ($5 per square foot, maximum $1,500, no depreciation or carryover) and the actual method (Form 8829, allows depreciation but creates recapture risk on future home sale). You can switch between methods each year — there is no lock-in. Which method do you prefer?"

W-2 coordination:

"Do you (or your spouse, if filing jointly) have W-2 wages from any job in 2025? If yes, I need the total from Box 3 (Social Security wages) on each W-2. This affects the Social Security portion of your self-employment tax because the $176,100 wage base cap applies to combined earnings."

1099 cross-check:

"Did you receive any 1099-NEC, 1099-MISC, or 1099-K forms for 2025? The IRS computer-matches these against your Schedule C gross receipts. I need to verify that your Line 1 gross receipts equal or exceed the total of all 1099 forms received."

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Section 10 — Reference Material

Key Legislation

• IRC 61 — Gross income definition
• IRC 164(f) — Deductible half of self-employment tax
• IRC 168(c) — Recovery periods (39-year for home office depreciation)
• IRC 280A — Business use of home
• IRC 280A(c)(5) — Gross income limitation
• IRC 465 — At-risk limitations
• IRC 1401 — Self-employment tax rates
• IRC 1402 — Net earnings from self-employment
• IRC 1402(a)(12) — 92.35% adjustment
• IRC 1402(b)(2) — $400 minimum threshold
• IRC 1402(l) — Nonfarm optional method
• IRC 3101(b)(2) — Additional Medicare Tax thresholds

IRS Publications and Forms

• Pub 334 (2025) — Tax Guide for Small Business
• Pub 587 (2025) — Business Use of Your Home
• Pub 946 (2025) — How to Depreciate Property
• Schedule C (Form 1040) Instructions (2025)
• Schedule SE (Form 1040) Instructions (2025)
• Form 8829 Instructions (2025)
• Form 8959 Instructions (2025) — Additional Medicare Tax

Filing Deadlines

Deadline	Event
April 15, 2026	Return due (TY2025)
October 15, 2026	Extended due date
Quarterly (4/15, 6/15, 9/15, 1/15)	Estimated tax payments (EFTPS)

Key Court Decisions

• Commissioner v. Soliman, 506 U.S. 168 (1993) — Principal place of business test
• Welch v. Helvering, 290 U.S. 111 (1933) — "Ordinary and necessary" standard

2025 Year-Specific Figures Summary

Figure	Value
SS wage base	$176,100
SE tax rate	15.3% (12.4% + 2.9%)
92.35% adjustment	0.9235
Additional Medicare Tax	0.9% above $200K/$250K/$125K
Simplified home office rate	$5/sq ft, max 300 sq ft = $1,500
Standard mileage rate	$0.70/mile
179 expensing limit	$1,250,000 (OBBBA)
Bonus depreciation	100% (OBBBA restored)

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