How do I complete Schedule C as a self-employed person?
Schedule C (Profit or Loss from Business) is where self-employed sole proprietors and single-member LLC owners report their business income and deductible expenses to calculate net profit. **Key sections of Schedule C:** **Part I — Income** - Line 1: Gross receipts or sales (total income before any deductions) - Line 2: Returns and allowances (refunds issued to customers) - Line 4: Cost of Goods Sold (from Part III — for product-based businesses) - Line 7: Gross profit **Part II — Expenses** - Line 8: Advertising - Line 9: Car and truck expenses (Standard Mileage or actual) - Line 11: Contract labor (subcontractors) - Line 14: Employee benefit programs - Line 15: Insurance (business) - Line 16b: Business interest and bank fees - Line 17: Legal and professional fees - Line 18: Office expense (software, supplies) - Line 19: Pension and profit-sharing plans - Line 20a: Rent — vehicle, machinery, and equipment - Line 20b: Rent — other business property - Line 21: Repairs and maintenance - Line 22: Supplies - Line 24a: Travel - Line 24b: Deductible meals (50% of actual) - Line 25: Utilities - Line 27a: Other expenses (professional development, etc.) - Line 30: Home office (from Form 8829, or simplified calculation) **Net Profit (Line 31)** flows to Schedule SE for SE Tax and to Form 1040.
- Schedule C Part I: report all gross business income
- Schedule C Part II: all deductible business expenses by category
- Net profit (Line 31) = income minus expenses
- Net profit is subject to both SE Tax (Schedule SE) and income tax (1040)
- Must file a separate Schedule C for each unrelated business you operate