Schedule C form: What it is and how to file for your business

Published Thursday 29 January 2026

Table of contents

• What is a Schedule C?
• Who should file a Schedule C?
• Information you provide on Schedule C
• How to file a Schedule C
• Where to find Schedule C forms
• Schedule C deadlines and filing timeline
• Common Schedule C mistakes to avoid
• Simplify your Schedule C filing with Xero
• FAQs on Schedule C

Key takeaways

• File Schedule C if you operate as a sole proprietor, single-member LLC, freelancer, or independent contractor to report your business income and expenses on your personal tax return.
• Track all business expenses throughout the year using separate business accounts to avoid mixing personal and business costs, which can lead to filing errors and missed deductions.
• Choose between the standard mileage method (70 cents per mile in 2025) or actual expense method for vehicle deductions, but maintain detailed mileage logs regardless of which method you select.
• Complete Schedule SE for self-employment tax if your net earnings from self-employment were $400 or more, as this calculates your Social Security and Medicare taxes on business income.

What is a Schedule C?

Schedule C is a tax form that reports your business profit or loss to the IRS. Self-employed individuals, freelancers, and independent contractors use this form to report business income and expenses on their annual tax return.

You must file Schedule C if you operate a business with the intent to earn a profit. This includes most self-employment activities except rental property income. The IRS treats activities done primarily for pleasure as hobbies, not businesses.

If you fill out a Schedule C, you may also have to complete Schedule SE, Self-Employment Tax. You use this form to calculate your social security and Medicare tax based on your self-employment income.

Who should file a Schedule C?

Schedule C filers include these business types:

• Sole proprietors: Unincorporated businesses owned by one person
• Single-member LLCs: Limited liability companies with one owner (unless electing corporate tax treatment)
• Freelancers and contractors: Independent workers receiving 1099 income
• Side business owners: People with part-time businesses alongside regular employment

Don't use Schedule C if your business operates as:

• C Corporation
• S corporation: Businesses that have elected S corporation tax treatment
• Partnership
• Multi-member LLC: An LLC with more than one member, which the IRS typically classifies as a partnership for federal income tax purposes

Sole proprietorships

A sole proprietorship is an unincorporated business operated and owned by one person. It's the simplest and least expensive type of business structure. If you operate a business on your own and have not chosen another business structure, the IRS treats you as a sole proprietor.

A sole proprietorship is often the easiest option if you are not ready to take on the cost of forming a separate legal entity. Making the right choice depends on your income, the type of your business and individual management preferences. Even if you are only doing odd jobs to supplement your income, you must report your income and expenses from the business on Schedule C.

Limited liability company (LLC)

An LLC is a legally separate business entity that's created by filing paperwork with the applicable state government. An LLC can have any number of members, but if there's only one, the IRS treats it by default as a disregarded entity for income tax purposes, which means it is not considered separate from its owner and does not file its own income tax return.

However, the IRS clarifies that this status does not apply to all tax types, and the LLC is still treated as a separate entity for employment and excise taxes. So unless you elect to have your LLC taxed as a corporation, taxes are handled on your personal tax return through Schedule C.

Information you provide on Schedule C

Schedule C information helps the IRS calculate your business tax liability and self-employment tax. The form requires you to report your business's financial performance for the tax year.

Required information includes:

• Business details: Name, address, business type, and industry code
• Income: All business revenue and receipts
• Expenses: Deductible business costs and purchases
• Profit or loss: Your net business income after expenses

Details about your business

Business details section requires:

• Proprietor name: Your legal name as the business owner
• Business name: Your official business name (if different from your name)
• Business address: Physical location where you conduct business
• Industry code: Your NAICS code (find yours at the US Census Bureau website)
• EIN: Employee Identification Number (if you have one)

Income

Income calculation follows these steps:

1. Report gross receipts: Total money received from business activities
2. Subtract returns and allowances: Money refunded to customers
3. Subtract cost of goods sold: Direct costs to produce your products
4. Calculate gross profit: Gross receipts minus returns and cost of goods sold
5. Add other income: Any additional business income sources

Expenses

Business expense categories include:

• Advertising and promotion: Marketing costs and promotional materials
• Car and truck expenses: Vehicle costs for business use
• Insurance: Business liability and property insurance premiums
• Legal and professional services: Attorney and accountant fees
• Office expenses: Supplies, equipment, and administrative costs
• Repairs and maintenance: Equipment and property maintenance costs
• Other expenses: Any legitimate business costs not listed above

Cost of goods sold

Businesses that sell products use this section to show the cost of goods sold (COGS). This includes line items such as inventory, purchases, materials and supplies, and other costs.

Vehicle expenses and depreciation

Vehicle expense options (choose one method):

Standard mileage method:

• Rate: Multiply business miles by the IRS standard rate, which is 70 cents per mile for business use in 2025.
• Requirements: Track total miles and business miles
• Forms needed: Complete on Schedule C page 2

Actual expense method:

• Costs included: Gas, repairs, insurance, depreciation
• Requirements: Track total miles and business miles
• Forms needed: Schedule C plus IRS Form 4562 for depreciation

How to file a Schedule C

Schedule C filing attaches to your Form 1040 individual tax return. You cannot file Schedule C separately.

Additional forms you may need:

• Schedule SE: Calculate self-employment tax (required if, as the IRS specifies, your net earnings from self-employment were $400 or more).
• Form 4562: Report depreciation on business assets
• Form 8829: Claim home office deduction (if applicable)

Where to find Schedule C forms

You can download a blank Schedule C form directly from the IRS website. Most tax preparation software, including online accounting platforms, will also provide the form and guide you through filling it out as part of the tax filing process.

Schedule C deadlines and filing timeline

Schedule C is filed with your personal tax return, Form 1040. The deadline is typically April 15 each year. If you file for an extension for your personal taxes, the deadline for your Schedule C is also extended, usually to October 15.

Even with an extension, you still need to pay any estimated taxes by the original April deadline to avoid penalties. Gather your business records and prepare your financial statements early so filing your return is quicker and easier.

Common Schedule C mistakes to avoid

Filing your taxes can feel complex, but avoiding a few common errors can make the process much easier. Keeping accurate and organized records throughout the year is the best way to prevent mistakes.

Here are a few things to watch out for:

• Mixing business and personal expenses: Only deduct expenses that are directly related to your business. Using a separate business bank account can help keep things clear.
• Forgetting to deduct all eligible expenses: Small business owners often miss out on valid deductions. Track everything from office supplies to software subscriptions.
• Incorrectly reporting income: Make sure the income you report on Schedule C matches the amounts reported on any 1099-NEC forms you received.
• Errors in vehicle expense calculations: Whether you use the standard mileage rate or actual expenses, accurate mileage logs are essential for backing up your claim.

Simplify your Schedule C filing with Xero

Staying organized is the key to a stress-free tax season. When your income and expenses are tracked accurately throughout the year, filling out your Schedule C becomes a simple task of running a report.

Xero helps you manage your business finances with confidence. By automating your record-keeping, you can see your financial position in real time and have everything you need ready for tax time. Focus on running your business, not your books. Get one month free to see how easy it can be.

FAQs on Schedule C

Still have questions about filing Schedule C? Here are answers to some common concerns.

Do I need to file a Schedule C with no income?

If you were actively engaged in your business but didn't receive any income, you should still file to claim your business expenses.

Do I have to file a Schedule C if I receive a 1099-NEC?

Yes. When you receive Form 1099-NEC, it means you received earned income that was not part of your wages, so the IRS considers you self-employed for this income, even if it is part-time or a one-off. You're required to report all of your self-employed income to the IRS.

Does an LLC file a Schedule C?

Yes, an LLC files a Schedule C if it only has one member and it hasn't made any special elections. If you elect to file your taxes as a corporation, you won't use a Schedule C to report business income and expenses. Also, if an LLC owns rental property or uses the LLC to hold investments, it doesn't use Schedule C.

What is the minimum income to file a Schedule C?

There's no minimum income threshold for filing Schedule C with the IRS. You must report all business income and expenses on your Schedule C no matter the size of the amount.

How do I determine my vehicle expenses?

There are two methods for calculating the business use of your car:

• Actual expense method: The actual expense method is based on the expenses you incur in the business operation of your vehicle, including gas purchases, oil changes, insurance, and vehicle depreciation.
• Standard mileage method: Using the standard mileage method, you multiply your business miles by the amount per mile allotted by the IRS.