Guide · United States · Schedule C (Form 1040)

Schedule C for US freelancers: Profit or Loss From Business

If you work for yourself as a sole proprietor (or a single-member LLC that hasn't elected to be a corporation), Schedule C is where you report the business's income and expenses on your Form 1040. Here's who files it, what the parts cover, how 1099-NECs land on line 1, the Part II expense list, car and home-office lines, and where the net profit goes next.

Checked against IRS pages, the Instructions for Schedule C, and the Schedule C PDF on 2026-10-13. The form and instructions still online then were the 2025 tax-year edition. Not written by a tax professional.

General information, not tax advice. This page summarises IRS guidance for a US citizen or resident who is a sole proprietor or the sole member of a domestic LLC taxed as a disregarded entity. It covers federal rules only: states have their own. It doesn't cover partnerships, S corporations, farming (Schedule F), rental real estate on Schedule E, inventory-heavy retail, or whether an activity is a hobby. Check with the IRS or a tax professional for your situation. We have no affiliate links or deals with anyone mentioned here.

The short answer

Schedule C (Profit or Loss From Business (Sole Proprietorship)) is how a sole proprietor reports business profit or loss on Form 1040 (About Schedule C).
An activity counts as a business if your primary purpose is income or profit and you do it with continuity and regularity — not a sporadic hobby (Instructions for Schedule C).
Line 1 is gross receipts. Include amounts properly shown on Forms 1099-NEC; if box 1 totals are higher than what you report, attach a statement explaining the difference (Instructions, Line 1).
Part II has labelled expense lines (advertising, car, office, supplies, and the rest). Home-office costs go on line 30 only, not mixed into the other lines (Schedule C (2025) PDF).
Line 31 net profit for an individual goes on Schedule 1 (Form 1040), line 3, and usually on Schedule SE, line 2 (Instructions, Line 31 — Individuals).

1. Who files Schedule C

Use Schedule C to report income or loss from a business you operated or a profession you practiced as a sole proprietor (About Schedule C; Instructions).

Single-member domestic LLC: generally not treated as a separate entity for federal income tax. If you're the sole member and haven't elected to treat it as a corporation, you file Schedule C (or Schedule E or F, if those fit) (Instructions, Limited liability company (LLC)).
Also on Schedule C: wages and expenses as a statutory employee; certain qualified joint ventures; and certain amounts shown on Forms 1099-MISC, 1099-NEC and 1099-K (Instructions).
Not Schedule C: partnerships generally file Form 1065; farming uses Schedule F; rental real estate not subject to self-employment tax is often Schedule E (Other Schedules and Forms You May Have To File).

You may also owe state and local tax, licences and fees — check your state (Instructions). The IRS's Manage taxes for your gig work page and Self-employed individuals tax center point freelancers and gig workers at the same forms.

2. The parts of the form

The 2025 Schedule C PDF is organised as (Schedule C (2025)):

Part I — Income: gross receipts (line 1), returns, cost of goods sold, other income, and gross income.
Part II — Expenses: the labelled lines 8–27b, total expenses on line 28, tentative profit on line 29, home office on line 30, net profit or loss on line 31.
Part III — Cost of goods sold: mainly for businesses with inventory.
Part IV — Information on your vehicle: when you claim car or truck expenses on line 9 under the rules in the instructions.
Part V — Other expenses: a list that totals onto line 27b.

3. Part I: income and your 1099-NECs

On line 1, enter gross receipts from your trade or business. Check any Forms 1099 you received for business income that belongs on this line (Instructions, Line 1).

If you received one or more Forms 1099-NEC, line 1 must include amounts properly shown on them. If the total of box 1 on those forms is more than what you report on line 1, attach a statement explaining the difference (Instructions, Line 1).
Report all business income that belongs on Schedule C, including amounts no client sent a form for. A missing 1099 does not make the income disappear (Manage taxes for your gig work).
Our free Form 1099-NEC guide and checker covers who should send you one, the threshold by year, and what to do if a form is missing or wrong.

4. Part II: expense categories

Part II lists common business expense categories. The form says to enter expenses for business use of your home only on line 30 (Schedule C (2025)). Labels below are from that PDF; the instructions add detail for each line (Instructions, Part II).

Schedule C Part II expense line numbers and labels from the 2025 form
Line	Label on the form
8	Advertising
9	Car and truck expenses
10	Commissions and fees
11	Contract labor
12	Depletion
13	Depreciation and section 179 expense deduction
14	Employee benefit programs (other than on line 19)
15	Insurance (other than health)
16a	Interest — Mortgage (paid to banks, etc.)
16b	Interest — Other
17	Legal and professional services
18	Office expense
19	Pension and profit-sharing plans
20a	Rent or lease — Vehicles, machinery, and equipment
20b	Rent or lease — Other business property
21	Repairs and maintenance
22	Supplies (not included in Part III)
23	Taxes and licenses
24a	Travel
24b	Deductible meals
25	Utilities
26	Wages (less employment credits)
27a	Energy efficient commercial buildings deduction
27b	Other expenses (from line 48)

Whether a particular cost is deductible, and how much, depends on the Internal Revenue Code and the instructions for that line — this table is only the form's labels. Publication 334, Tax Guide for Small Business is the IRS's longer small-business overview for Schedule C filers.

5. Car and truck expenses

For line 9 you can generally deduct actual car or truck expenses or take the standard mileage rate, with limits in the instructions (for example, five or more vehicles used simultaneously, or a leased vehicle you previously used the standard mileage rate for) (Instructions, Line 9).

The 2025 Instructions for Schedule C state a standard mileage rate of 70 cents per mile for 2025 business use (Instructions, What's New / Line 9). That figure is for the 2025 edition; later years use the IRS rate for that year.
Complete Part IV when you claim the standard mileage rate, you lease the vehicle, or it is fully depreciated, and you aren't required to file Form 4562 for another reason (Instructions, Line 9).
Our free US mileage log and IRS mileage rate calculator keeps a trip log in your browser and applies the published rate for the date of each trip (including mid-year changes).

6. Business use of your home

Line 30 is for expenses for business use of your home. Don't report those elsewhere on Schedule C (Schedule C (2025)).

You may use Form 8829 to figure the allowable amount (and any carryover), or the simplified method in the Schedule C instructions (About Form 8829; Instructions, Line 30).
Other requirements still apply (exclusive and regular use, and the income limitation). The instructions walk through both methods; this page doesn't decide whether you qualify.

7. Net profit, Schedule SE and estimated tax

Line 31 is net profit or (loss) after line 30. For most individuals:

Enter the amount on Schedule 1 (Form 1040), line 3, and on Schedule SE (Form 1040), line 2 (statutory employees and notaries have special rules) (Instructions, Line 31 — Individuals).
Self-employment tax generally applies if net earnings from self-employment are $400 or more (IRS Topic 554). Our free US self-employment tax calculator works Schedule SE the IRS way (federal only).
Many freelancers also pay quarterly estimated tax. Our free US quarterly estimated tax planner covers the owe-at-least threshold, safe harbors and the year's due dates.

8. Records that make the form fillable

Schedule C is easier when your records already look like its lines:

Income: invoices, payment confirmations, and every 1099-NEC / 1099-K / 1099-MISC, reconciled to what you actually received.
Expenses: receipts or statements tagged to a Part II category (or Part V "other"), with the business purpose noted.
Vehicle: date, destination, business purpose and miles (and odometer readings if you use them), ready for Part IV.
Home office: square footage and the expenses Form 8829 or the simplified method need, kept separate from the Part II lines.

Publication 334 and the Schedule C instructions are the IRS starting points; keep what supports every number you put on the form.

Keeping those records

Free tools on this site that map onto Schedule C habits (they run in your browser; nothing is sent or saved):

Free invoice generator — invoices in US dollars (or any currency), printable or PDF.
US mileage log — trips and the IRS standard mileage rate by date.
1099-NEC checker, self-employment tax calculator, quarterly estimated tax planner.

For a running spreadsheet of invoices, payments and expenses you can align to Schedule C-style categories at year end, our paid Freelance Billing Kit by Small Rows (US$12, one-time) is built for freelancers who bill in any currency. It doesn't file your return or suggest a tax rate.

Where the sources differ

We read the pages under Sources on 2026-10-13. A few details to watch:

The form and instructions online are still the 2025 edition. About Schedule C links the current revision; the PDF and instructions we captured are labelled 2025. When the IRS publishes the next year's Schedule C, re-check line labels and the mileage figure before you file.
Mileage rates change by year (and sometimes mid-year). The 2025 instructions say 70 cents per mile for 2025. Our US mileage calculator uses the IRS rate tables for each trip's date instead of copying one number from the Schedule C instructions.
1099-NEC thresholds moved for 2026 payments. Older Schedule C instruction text may still mention $600 in examples about filing 1099-NECs you issue to others. For forms you receive, use the 1099-NEC guide and the Instructions for Forms 1099-MISC and 1099-NEC for the year of the payment.

When to talk to a tax professional

you're unsure whether the activity is a business or a hobby;
you have inventory, employees, a home-office claim, vehicle depreciation, or large equipment purchases;
you've formed (or are thinking about) an S corporation or partnership;
a 1099-NEC total doesn't match your records and the client won't correct it;
you received an IRS notice, or you aren't a US citizen or resident.

Form 1099-NEC for US freelancers — who sends one, the threshold, W-9s and a free checker.
Form W-9 for US freelancers — name, TIN and certification clients ask for before paying.
US self-employment tax calculator — Social Security and Medicare on your profit.
US quarterly estimated tax planner — who pays, due dates and four payments.
US mileage log and IRS mileage rate calculator.
Form T2125 for Canadian freelancers and UK Self Assessment for freelancers (the SA103 pages), if you also file there.
Canadian GST/HST invoice requirements and UK VAT invoice requirements, if you also bill there.
All free tools.

Sources

IRS pages, instructions and PDFs, read on 2026-10-13. Check the live page before you rely on it.

Schedule C: About Schedule C (Form 1040) · Instructions for Schedule C · Schedule C (Form 1040) 2025, PDF
Related: About Form 8829 · Publication 334, Tax Guide for Small Business · Manage taxes for your gig work · Self-employed individuals tax center · Topic 554 · Estimated taxes · About Form 1099-NEC

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