SELF-EMPLOYMENT/LANDLORDS/INDEPENDENT CONTRACTORS: PROFIT & LOSS STATEMENT
WHAT IS A PROFIT & LOSS STATEMENT? Sound complicated? It’s simply a report showing what income was received and what expenses have been paid on a CASH BASIS, not ACCRUAL.
WHAT IS CASH BASIS?: Cash basis means income is reported as it was actually received (regardless when earned) and paid expenses are reported when actually paid (regardless when incurred).
ACCOUNTING SOFTWARE: If your accounting software is current you can easily and quickly generate a report. Remember to select CASH Basis. You may need to run 2 reports 1) select the appropriate 6 month period (see below under sample P&L) showing each month as a separate column.
NO ACCOUNTING SOFTWARE: This task will be more tedious. IRS Schedule C is not a substitution because covers wrong time period. 1) Gather bank statements for past 6 months. If you keep a separate business account, this is easier. 2) Review the transactions in the bank account(s) or gather receipts for the relevant months and plug the numbers into a spreadsheet.
USE FORMS BELOW: (PDF or Excel). See Sample P&L (type of reasonable & necessary business expenses depend on type of business)
|WHAT MONTH ARE WE IN?||PROFIT & LOSS STATEMENT|
|MAY||PDF | Excel|
|JUNE||PDF | Excel|
|JULY||PDF | Excel|
|AUGUST||PDF | Excel|
|SEPTEMBER||PDF | Excel|
|OCTOBER||PDF | Excel|
|NOVEMBER||PDF | Excel|
|DECEMBER||PDF | Excel|
|JANUARY||PDF | Excel|
|FEBRUARY||PDF | Excel|
|MARCH||PDF | Excel|
|APRIL||PDF | Excel|