How are the different schedules used and in what circumstances?
Cast yourself once again as both an employer and an employee. As an employer, you have tax responsibilities as a creator of income; as an employee, you have the tax responsibilities of a person who works for a living. Thus, as your employer, the income you create is a profit (or a loss), and you are entitled, just like any other for-profit business, to take deductions authorized for businesses. Schedule C or Schedule C-EZ are used to report your profit (or loss) and your business expenses to determine that. The result of that determination is part of your income as a person who works for a living. That part is reported on the front side of your 1040, which is the form for individual income tax.
Cast yourself once again as both an employer and an employee. As an employer, you have tax responsibilities as a creator of income; as an employee, you have the tax responsibilities of a person who works for a living. Thus, as your employer, the income you create is a profit (or a loss), and you are entitled, just like any other for-profit business, to take deductions authorized for businesses. Schedule C or Schedule C-EZ are used to report your profit (or loss) and your business expenses to determine that. The result of that determination is part of your income as a person who works for a living. That part is reported on the front side of your 1040, which is the form for individual income tax. Schedule SE is where you figure out how much you have to pay in employment taxes.
