What is Schedule C?

Schedule C (Form 1040) is the IRS tax form used by sole proprietors, independent contractors, freelancers, and gig economy workers to report business income and deductible expenses for calculating net profit or loss from self-employment. This form requires detailed reporting of gross receipts, cost of goods sold, and all ordinary and necessary business expenses, including advertising, vehicle expenses, supplies, insurance, and professional fees. The resulting net profit flows to Form 1040 and becomes subject to both income tax and self-employment tax. Schedule C filers can deduct the Home office expenses, business mileage, and health insurance premiums to reduce taxable income while maintaining proper documentation for IRS compliance.