Guide · Updated for 2026
How to Fill Out Schedule C
A plain-English, line-by-line walkthrough for freelancers and sole proprietors — from gross receipts to net profit and the self-employment tax that follows.
1Confirm Schedule C applies to you
Schedule C (Form 1040) reports profit or loss from a business you operate as a sole proprietor or single-member LLC. Freelancers, gig drivers, independent contractors, and Etsy/e-commerce sellers usually file it. If you received 1099-NEC or 1099-K forms, or invoices clients directly, this is typically your form. W-2 wages are reported elsewhere — they do not go on Schedule C.
2Fill in the header and business code
Enter your name, Social Security number, and business details. Lines A–I: your principal business (for example 'graphic design'), the business code that best matches it (the full list is in the Schedule C instructions), and your accounting method — most solo operators use cash. The current form and instructions are on the IRS Schedule C page.
3Report income (Part I)
Line 1 is gross receipts or sales — everything customers paid you before costs. Add returns and allowances on Line 2, cost of goods sold (Part III, if you sell products) on Line 4, and other income on Line 6. Line 7 is your gross income: receipts plus other income minus returns.
4Subtract expenses (Part II)
List ordinary and necessary business costs: advertising, supplies, contract labor, home office (Form 8829 or the simplified method), mileage, software, insurance, professional fees. Total them on Line 28. Tentative profit (Line 29) minus any home-office deduction (Line 30) gives your net profit on Line 31 — the number this site's calculators start from.
5Carry the numbers onward
Net profit flows to Schedule 1 (Form 1040) as business income. If net earnings are $400 or more, you also file Schedule SE, which computes self-employment tax — 15.3% on 92.35% of net profit, subject to the wage base and additional Medicare rules. Half of the SE tax is then deducted on Schedule 1.
6Watch deadlines and estimated taxes
Schedule C is filed with your Form 1040, due April 15 for the prior tax year (or the next business day if the deadline falls on a weekend or holiday). Unlike employees, no tax is withheld from your income during the year — many self-employed people make quarterly estimated payments (Form 1040-ES) covering both income tax and SE tax to avoid underpayment penalties. See the IRS self-employed tax center for current-year deadlines.
Official sources
- IRS — About Schedule C (Form 1040) — the current form, instructions, and business codes
- IRS — Self-Employed Individuals Tax Center — deadlines, estimated taxes, and SE tax overview
- IRS — About Form 1040-ES — quarterly estimated tax payments
Ready to run the numbers?
Use the self-employment tax calculator if you already know your net profit, or the Schedule C calculator to start from gross income and expenses.