The Schedule C may be required to report certain types of income and expenses. Receiving form 1099-Misc or 1099-Nec may be an indication that the Schedule C is required. The schedule C is used to report the amount of expenses needed to earn the revenue. Gross revenue – expenses= Net revenue. Tracking the income and expenses throughout the year simplifies the process and increases accuracy so that a Profit/Loss or Income Statement can be produced at the end of the year, or at any time throughout the year, for multiple purposes.

Schedule C Provisions since TY2017

Entertainment Expenses
In prior years, a taxpayer generally could deduct expenses for activities considered to be
entertainment, amusement, or recreation if the expenses were directly related or associated with the active conduct of the taxpayer’s trade or business. For amounts incurred or paid after December 31, 2017, deductions for entertainment expenses are disallowed.

The TCJA deemed entertainment expenses as nondeductible regardless of the relationship of the expenses to the business activity, including meals purchased during entertainment activities. There are a few exceptions outlined in Code Sec. 274(e) including:

•  Expenses for goods, services, and facilities that are treated as compensation to an
  employee
• Expenses paid or incurred by the taxpayer in connection with the performance of
  services for another person, under a reimbursement or other expenses allowance
  agreement
• Expenses for recreational, social, or similar activities primarily for the benefit of the taxpayer’s employees, other than highly compensated employees
  Businesses can still deduct 50% of amounts paid for meals associated with the active conduct of the taxpayer’s trade or business.

For example, employee travel meals are still 50% deductible.