🇺🇸 United States

Schedule C (Self-Employment)

Report freelance income and business expenses with your 1040

Medium ~30 min TaxSelf-EmployedFreelanceBusiness

/ What is this form?

Schedule C is where you report profits and losses from freelancing, side gigs, or sole proprietorship. It is filed as part of your 1040. You can deduct business expenses like equipment, software, home office, travel, and marketing.

/ Who needs this form?

Freelancers and independent contractors
Sole proprietors
Anyone with 1099-NEC income
Side gig workers (Uber, Etsy, consulting)

/ What you need before you start

1099-NEC forms from clients

Records of all business income

Receipts for business expenses

Home office measurements (if claiming)

/ Step-by-step guide

1 Gather Income Records

Collect all 1099-NEC forms from clients and records of any income not reported on a 1099.

2 Tally Business Expenses

Add up all deductible expenses: equipment, software, home office, vehicle mileage, marketing, professional development.

3 Calculate Home Office Deduction

If you use part of your home exclusively for business, calculate the square footage and use the simplified method ($5/sq ft, max 300 sq ft) or actual cost method.

4 Complete Schedule C

Enter gross income, deduct expenses, and calculate net profit or loss. This flows to your Form 1040.

5 Pay Self-Employment Tax

Calculate self-employment tax (Schedule SE) — 15.3% on net earnings above $400. Half is deductible.

/ Key fields explained

Field	What to enter	Common mistake
Gross receipts	Total business income before expenses	Include all income even if no 1099 was issued
Total expenses	All deductible business costs	Do not mix personal and business expenses

/ Common mistakes to avoid

Not tracking expenses throughout the year

Forgetting quarterly estimated tax payments (Form 1040-ES)

Not claiming legitimate deductions (home office, mileage, health insurance)

/ Frequently asked questions

Do I owe self-employment tax?

Yes, 15.3% on net earnings above $400 (Social Security + Medicare). This is in addition to income tax.