Small Business Returns 101: Side Gigs, LLCs, and Your First Schedule C

More nurses than ever have a side business — consulting, coaching, aesthetics, online sales. The good news: your first business return is less scary than it sounds. The key is understanding how the pieces connect.

Sole proprietor? You already have a business

If you earned self-employment income without forming an entity, you're a sole proprietor. Your business income and expenses go on Schedule C, which attaches to your personal Form 1040. No separate business return needed.

An LLC doesn't change your federal taxes (by default)

A single-member LLC is 'disregarded' for federal tax purposes — you still file Schedule C. The LLC provides liability protection; the taxes look the same. (California LLCs do owe an annual $800 franchise tax, so budget for that.)

Income is income, 1099 or not

Clients may not send you a 1099-NEC under $600, but you still report the income. Track everything you earn, not just what comes with paperwork.

Expenses must be ordinary and necessary

The IRS standard: an expense must be common in your line of work and helpful for your business. Software, marketing, supplies, professional fees, and a portion of your phone and internet often qualify.

When to consider an S-Corp election

Once your business consistently profits above a certain level, electing S-Corp status can reduce self-employment tax. It's not a DIY decision — the timing and payroll requirements matter.

Your first year in business sets the foundation. Clean books from day one make every future year easier — and cheaper to prepare.