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STARTING OUT
Freelancers, Meet Schedule C
by Kimberly Lankford

The IRS expects to receive more than 19 million schedule Cs or C-EZs this filing season. That's 320,000 more than last year and 1.6 million more than were filed in 1999, the year I left Kiplinger's because my husband was transferred to Boston.

I didn't really leave, though. I accepted a contract from the magazine and Web site to work on a freelance basis. When I moved back to Washington, D.C., where Kiplinger's is based, I liked the arrangement so much that I decided to keep my home office. And now that I'm a mom of an 18-month old, I couldn't imagine having to trudge downtown everyday.

What I enjoy most about being my own boss: stealing time to have lunch with my son. The downside: Tax time.

If you launched your own business last year, or took on a little extra work to pad your paycheck, let me introduce you to the Schedule C and its sister form Schedule SE, the forms most freelancers need to file with their 1040s.

First of all, expect to dedicate a lot more time to completing your income tax forms. The IRS says the average taxpayer will spend more than ten hours working on the schedule C, including nearly two hours learning about it.

Well, here's the short course, a rundown of the paperwork you'll need and a few tips to help lower your tax bill.

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