Fill Out Schedule C (Form 1040) Online: Profit or Loss From Business, 2025

Short answer: Schedule C (Form 1040) reports the profit or loss of a business you run on your own: freelancing, gig work, a shop, a single-member LLC. You list your income, subtract your expenses, and the result on line 31 flows into your Form 1040 and your self-employment tax. It is never filed alone: it is attached to your Form 1040. The blank form is free on irs.gov; you can also fill it on screen here.

PDFConverter2 is an independent website. It is not affiliated with the IRS or any government agency. This guide summarizes the 2025 Schedule C and the 2025 instructions published by the IRS, and it is not tax advice. Anything unusual about your business belongs with a tax professional and the full instructions at irs.gov/ScheduleC.

Read this first: Schedule C is part of a return

Schedule C has no filing address of its own. It is attached to Form 1040 (or 1040-SR, 1040-SS, 1040-NR or 1041) and goes wherever that return goes. That has two practical consequences.

• If you e-file, your tax software or preparer builds Schedule C from your answers. There is no PDF for you to fill, and this page is not needed.
• Filling the PDF makes sense if you file a paper return, if you are drafting your figures to hand to an accountant or preparer, or if you want a clean copy of your business numbers for your own records.

If you mail a return, the Form 1040 instructions explain where to send it. See Form 1040 on irs.gov.

Who uses it, and who should not

Use Schedule C if you operated a business or practiced a profession as a sole proprietor. The instructions describe an activity as a business if your primary purpose is income or profit and you are involved with continuity and regularity.

• Freelancers, contractors and gig workers whose income appears on Forms 1099-NEC, 1099-MISC or 1099-K report it here.
• A single-member domestic LLC is generally not a separate entity for federal income tax, so its owner files Schedule C, unless the LLC elected to be taxed as a corporation (Form 8832).
• Statutory employees report their W-2 box 1 income and related expenses here (see line 1 below).
• If you own more than one business, file a separate Schedule C for each.

Do not use it for:

• A partnership or a corporation. Partnerships file Form 1065. Spouses who jointly own and run an unincorporated business are generally partners, unless they elect to be a qualified joint venture (each materially participates, they are the only owners, and they file jointly; a business run through an LLC does not qualify) or wholly own it as community property and treat it as a sole proprietorship.
• A hobby or other nonbusiness activity. The instructions point you to Schedule 1 (Form 1040), line 8j.
• Farming, which uses Schedule F, or rental real estate and royalties, which usually use Schedule E.

Lines A to J: about the business

• Name and SSN: the proprietor, not the business. Estates and trusts filing Form 1041 skip the SSN and enter the EIN on line D.
• Line A: the business or professional activity that produced your main source of income, with the type of product or service. Wholesale, retail and production-related services should also name the type of customer.
• Line B: the six-digit code from the Principal Business or Professional Activity Codes chart at the end of the instructions.
• Line C: the business name. If there is no separate business name, leave it blank.
• Line D: the EIN issued on Form SS-4 if you have one, otherwise blank. Do not put your SSN here, and never another payer's EIN from a 1099. If you need one, see Form SS-4.
• Line E: the business address, as a street address and not a box number. If you ran the business from the home address on your return, you do not have to complete it.
• Line F: cash, accrual or other. Cash method means income is counted when actually or constructively received and expenses when paid. The method must clearly reflect income, and changing it generally takes Form 3115.
• Line G: did you materially participate? Yes if you met any one of the seven tests in the instructions, for example more than 500 hours in the year, or more than 100 hours and at least as much as anyone else. No makes the activity passive, and a loss may be limited by Form 8582.
• Line H: tick if you started or acquired the business during the year, or reopened it without having filed a Schedule C for the prior year.
• Lines I and J: whether you made payments that required you to file Forms 1099, and if so whether you did or will file them. The instructions point to the General Instructions for Certain Information Returns.

Part I: income

• Line 1, gross receipts or sales: gross receipts from your trade or business from all sources. Check every Form 1099 you received for business income, including Forms 1099-NEC, 1099-MISC and 1099-K. If the Form 1099-NEC box 1 total is more than what you report on line 1, the instructions say to attach a statement explaining the difference. A statutory employee enters W-2 box 1 here and ticks the box on the line.
• Line 2, returns and allowances: refunds and price reductions given to customers, entered as a positive number.
• Line 4: cost of goods sold from line 42 (Part III). Leave it empty if you hold no inventory.
• Line 6, other income: business income not elsewhere in Part I, such as scrap sales, recovered bad debts, interest on business notes and accounts receivable, business prizes, and state fuel tax refunds.
• Lines 3, 5 and 7 are subtractions and additions of the lines above them.

Part II: expenses

Each expense goes on one line, and business use of your home goes on line 30 only. The lines people mix up:

• Line 9, car and truck expenses. Either the actual business share of gasoline, oil, repairs, insurance and license plates, or the standard mileage rate. For 2025 the instructions give 70 cents per mile: business miles times 0.70, plus parking fees and tolls, with no separate depreciation or rent. Depreciation goes on line 13 and lease payments on line 20a when you use actual expenses. Whichever you choose, you must give vehicle information, covered under Part IV below.
• Line 11, contract labor is for people who are not your employees. Line 26, wages is for employees, and it excludes anything paid to yourself. The instructions cite a $600-per-year threshold for filing Form 1099-NEC for contract labor and for commissions and fees.
• Line 13, depreciation and section 179. Form 4562 is required if you claim depreciation on property placed in service during the year, depreciation on listed property such as a car, or a section 179 deduction.
• Line 14 versus Schedule 1. Employee benefit programs go on line 14, but your own health insurance as a self-employed person does not; the instructions send it to Schedule 1 (Form 1040), line 17. Retirement plan contributions made for you go to Schedule 1, line 16, while contributions for your employees go on line 19.
• Lines 16a and 16b, interest. Mortgage interest on business real property for which you received a Form 1098 goes on 16a; other interest goes on 16b.
• Line 17, legal and professional services includes accountants' fees for preparing business tax forms. Line 18, office expense covers office supplies and postage. Line 22, supplies excludes anything already counted in Part III.
• Lines 20a and 20b: renting vehicles, machinery and equipment versus other property such as office space.
• Line 23, taxes and licenses does not include federal income tax or your self-employment tax. You deduct half of the self-employment tax on Schedule 1 (Form 1040), line 15.
• Lines 24a and 24b. Travel (24a) covers lodging and transportation away from your tax home and excludes meals. Deductible meals (24b) are generally 50% of the actual cost, or 80% for individuals under Department of Transportation hours-of-service limits. Entertainment goes on neither line.
• Lines 27a and 27b are new for 2025. The 2025 instructions say the energy efficient commercial buildings deduction (Form 7205) now goes on 27a and other expenses from line 48 now go on 27b. Older guides put other expenses on 27a.
• Line 28: total expenses before home use, the sum of lines 8 through 27b. Line 29: tentative profit or loss, line 7 minus line 28.

Line 30: business use of your home

Line 30 takes either the amount from Form 8829 (its line 36) or the result of the simplified method. For the simplified method the instructions say to multiply the area you use regularly and exclusively for business, regularly for daycare, or regularly for storage of inventory or product samples, by $5, with the area capped at 300 square feet. Enter the total square footage of your home and of the business part in the two boxes on line 30, and use the Simplified Method Worksheet in the instructions for the amount. The deduction is limited by the gross income from that use of your home. The election is made each year on a timely filed original return, and once made it cannot be revoked for that year. The simplified method is not an alternative to the exclusive-use test. See Form 8829 and Publication 587.

Part III: cost of goods sold

Fill this in only if making, buying or selling merchandise is part of how you earn income. Line 33 is how you value closing inventory (cost, lower of cost or market, or other); line 34 asks whether that changed; lines 35 to 39 are opening inventory, purchases less personal withdrawals, labor (never your own pay), materials and supplies, and other costs. Line 40 adds 35 through 39, line 41 is closing inventory, and line 42 is line 40 minus line 41, which also goes on line 4. A small business taxpayer, one with average annual gross receipts of $31 million or less over the three prior years (indexed for inflation) that is not a tax shelter, may choose not to keep an inventory; see Publication 538.

Part IV: information on your vehicle

Complete it only if you claim car or truck expenses on line 9 and you are not required to file Form 4562 for this business. The instructions say Part IV is for people who use the standard mileage rate, lease the vehicle, or have a fully depreciated vehicle. If you claim depreciation on the vehicle or have to file Form 4562 for another reason, Form 4562 Part V is used instead.

• Line 43: the date you placed the vehicle in service for business.
• Line 44: total miles for the year, split into business, commuting and other. Commuting is generally home to a regular work location; travel to a temporary work location is business travel.
• Lines 45 to 47: whether the vehicle was available for personal use off duty, whether you or your spouse have another vehicle for personal use, and whether you have written evidence for the deduction.

Part V: other expenses, line 48

List each business expense that has no line of its own, with its amount, and put the total on line 48 and line 27b. The instructions give examples that fit here: amortization, bad debts that were included in income, startup costs, and the de minimis safe harbor for small tangible items. Do not include the cost of equipment or furniture, charitable contributions, personal or family expenses, or fines and penalties paid to a government.

• Startup costs: if your business began in 2025, you can elect to deduct up to $5,000, reduced by the amount your total startup costs exceed $50,000. The rest is amortized over 180 months.
• De minimis safe harbor: up to $2,500 per item or invoice without an applicable financial statement, and up to $5,000 with one, if you elect it.

Lines 31 and 32: profit, loss and where they go

Line 31 is line 29 minus line 30. Where it goes depends on who you are.

• Individuals: include it on Schedule 1 (Form 1040), line 3, and on Schedule SE, line 2, to figure self-employment tax. See Schedule SE.
• Statutory employees: Schedule 1, line 3, but not Schedule SE.
• Nonresident aliens: Schedule 1, line 3; Schedule SE only if covered by the U.S. social security system under an international agreement.
• Estates and trusts: Form 1041, line 3.

A net profit may also qualify for the qualified business income deduction (Form 8995 or 8995-A) and the instructions note it is earned income, which can matter for the earned income credit.

If line 31 is a loss, the form tells you to go to line 32. Tick 32a if all your investment is at risk or 32b if some is not. For 32b you must attach Form 6198, and the instructions warn that leaving it off can delay processing. A No on line G can also bring in Form 8582, and an excess business loss is figured on Form 461. Do not enter the loss on line 31 until you have applied those rules.

Check the totals yourself

Our editor types into the boxes of the official PDF and does not calculate anything. Do not expect the totals to fill in as you go. Work these out on paper or in a spreadsheet and enter them, then re-add them before you download:

• line 3 (line 1 minus line 2), line 5 (line 3 minus line 4) and line 7 (line 5 plus line 6)
• line 28 (lines 8 through 27b), line 29 (line 7 minus line 28) and line 31 (line 29 minus line 30)
• line 40, line 42 and line 48, with line 42 repeated on line 4 and line 48 repeated on line 27b

Common mistakes

• Filing it alone. It goes with Form 1040.
• Putting a home office on lines 8 to 27. Business use of the home goes on line 30 only.
• Mixing the car methods. Standard mileage on line 9 with depreciation on line 13 for the same car.
• Treating a hobby as a business, or the reverse.
• 1099-NEC totals larger than line 1 without the explanatory statement.
• Claiming the same car loan interest twice. The 2025 instructions say that if you deducted the personal share on Schedule 1-A you cannot also deduct that interest on Schedule C.
• Deducting self-employment tax on line 23. Half of it belongs on Schedule 1, line 15.
• Forgetting the new line numbers: 27a and 27b changed in 2025.
• One Schedule C for two businesses. Each business gets its own.

Where it goes and what happens next

Schedule C is attached to Form 1040 and filed with it, on paper or electronically. Keep your records for the business: the instructions note that books and records relating to a form must be kept as long as their contents may become material to any Internal Revenue law. The Form 1040 instructions explain where to file.

Related forms

• Form SS-4: apply for an EIN, needed on line D only in the cases the instructions list.
• Form W-9: the form a client may ask you for before paying you as a contractor, so they can send you a Form 1099-NEC.
• Form 8822: tell the IRS your home mailing address has changed.

Filling it here

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