 Here we are in our example, Form 1040, populating it with LASERC tax software. You don't need tax software to follow along, but if you have access to it, it's a great tool to run scenarios with. You can also get access to the Form 1040 related schedules and forms at the IRS, website irs.gov, irs.gov, starting point as normal, single filer, Mr. Anderson, no dependence, 100,000 W2 income. We've got the 12,950 standard deduction, bringing us to the 87,050. If I check that out in our formula over here, 100,000, 12,950, 87,050, the tax is being calculated depending on the software and we are dependent on the software to calculate the tax is what I mean, 14774, we're saying there's 15,000 of withholdings to get us down to the overpayment of 226 mirrored over here as well. Now I just want, we're gonna do a quick look then at what would happen if our income was coming from a Schedule C type of business. So right here we've got our income obviously on the W2 side of things. What if it was business income? Now, as we look at this, we wanna just get an idea of the added complexity involved with a business income. And remember, if you're doing tax return preparation, then you might be thinking, where do I wanna specialize? Do I want to be picking up a lot of businesses or do maybe I wanna be doing non-business tax returns and not take on a lot of the added complexities that might come with business type of tax returns? Where do we want to be specializing within? So our main focus here is on the income side of things. So if I open up the Schedule 1, we could see that we're gonna have these other income items and we're looking here at the business income coming from the Schedule C. This will feed into page one as we've seen before with the Schedule 1 that will be feeding into this page one. But as we do that, we're also gonna see a lot of other items that are impacted when we add the Schedule C income. So let's just add a simple Schedule C and look at some of those changes that will take place. So I'm gonna go to income. I'm gonna say it's a Schedule C business. This is where we would add a whole nother income statement. I'm not gonna add anything except some income line and expense line. So let's say there was 30,000 of income and then we had advertised an expense of 10,000 to bring us down to 20,000, basically net of this little income statement. So if I say, okay, what would happen if I pull that on over to the form 1040? And we say, okay, now I've got a Schedule C. So I haven't populated it in terms of all the stuff up top, we'll talk more about that later. But the general idea is that we've got an income statement down below, income 30,000 minus the expense of 10,000. That's gonna give us a net income in essence of the 20,000. And that's what's gonna pull into the Schedule 1. So now in the Schedule 1, we've got the 20,000 and there it is in that 20,000. It's then gonna pull into the form 1040 where we have the 100,000 and then the Schedule 1 stuff of the 20,000 to get us to 120,000. So not too complex. That's kind of what we would expect to see at that point. But if I go back to the Schedule C, remember that really what pulled over wasn't actually just the income line. If I look at my income tax equation, we kind of think about income, everything that's income up top and then the equivalent of expenses down below being deductions to get to the equivalent of taxable or net income, which is taxable income. But here we have all these expenses that are really being recorded, which are deductions on the Schedule C. So these are business deductions that are being recorded. And what's being pulled into our tax formula, is it really income, gross income? It's the net income that's coming from our Schedule C. Now, obviously in order to populate the Schedule C, we need basically an income statement. So that means we need some level of bookkeeping. So if you do taxes, then the question is are you specializing and are you gonna help out with bookkeeping or adjusting kind of entries if you're gonna be helping out and populating the Schedule C, which oftentimes small businesses could use some help in that department. Also, if they give you an income statement, then this isn't exactly using the double entry accounting system because there's no balance sheet. So in order to get a better grasp on this, it would be better to have the businesses using something like a QuickBooks that uses a double entry accounting system and populates a balance sheet and whatnot so that you can have more assurance on this income statement that's being used to populate the Schedule C. So those are just a couple added complexities with regards to the Schedule C income. Also note that if you had Schedule C income and no business income, no W2 income, then you'd also have to be thinking about how they're gonna pay their taxes as the year goes, meaning they would have had to pay in 2022, not by April 15th or 18th of 2023 to avoid penalties and interest. So you have that added level of complexity to deal with. And then you also have the self-employment tax. So we'll go into this in more detail later, but just to see the added kind of complexity by going to the self-employment tax.