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Schedule C (Self-Employment)

Report freelance income and business expenses with your 1040

Medium~30 minTaxSelf-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

1Gather Income Records
Collect all 1099-NEC forms from clients and records of any income not reported on a 1099.
2Tally Business Expenses
Add up all deductible expenses: equipment, software, home office, vehicle mileage, marketing, professional development.
3Calculate 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.
4Complete Schedule C
Enter gross income, deduct expenses, and calculate net profit or loss. This flows to your Form 1040.
5Pay Self-Employment Tax
Calculate self-employment tax (Schedule SE) — 15.3% on net earnings above $400. Half is deductible.

/ Key fields explained

FieldWhat to enterCommon mistake
Gross receiptsTotal business income before expensesInclude all income even if no 1099 was issued
Total expensesAll deductible business costsDo 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.