What expenses can I put on Schedule C?

Ordinary, necessary business costs: software, supplies, advertising, professional fees, contract labor, business travel, mileage, a share of phone and internet, and a home office. Each one lowers net profit and cuts both your taxes.

Is Schedule C the same as a 1099?

No. A 1099-NEC reports income paid to you; Schedule C is how you report all your business income and expenses to the IRS. You file one Schedule C even if you received several 1099s — or none.

Do I need a Schedule C for a side hustle?

Yes — any self-employment income, even a small side gig, is reported on Schedule C. Your expenses go there too, so it's also how you lower the tax on that income.

Freelancer taxes

Schedule C, explained for freelancers

Updated June 2026·2 min read·Checked against IRS Rev. Proc. 2025-32

Schedule C is the heart of a freelancer's tax return — the form where your business income and expenses meet and become the profit you're actually taxed on. Understand this one page and the rest of self-employment taxes falls into place. Here's how it works for 2026.

Key takeaways

✓Schedule C turns revenue minus expenses into your net profit.
✓Net profit — not what clients paid you — is what's taxed.
✓That profit flows to both your 1040 (income tax) and Schedule SE (15.3%).

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What Schedule C is

Schedule C, "Profit or Loss from Business," is attached to your personal Form 1040. A sole proprietor or single-member LLC uses it to report one business's income and expenses. Its whole job is to arrive at one number — your net profit — which is what every other part of your self-employment tax is built on. You file one Schedule C per business.

Part I: your income

At the top you total your gross receipts — everything clients paid you, whether or not it showed up on a 1099. (The 1099-NEC forms you receive are just the IRS's copy; you report all income regardless.) Subtract returns and the cost of any goods sold, and you have gross income. For most service freelancers this part is simply the sum of what you invoiced.

Part II: your expenses

This is where the form earns its keep. You list ordinary, necessary business costs by category — advertising, supplies, software, contract labor, professional fees, business travel and meals, a portion of your phone and internet, mileage, and so on. The home office deduction comes in lower down. Every dollar here lowers your net profit, and because profit is the base for both your taxes, every legitimate expense saves you on income tax and self-employment tax at once.

Net profit, and where it goes

Income minus expenses is your net profit — the single number Schedule C exists to produce. From a freelancer netting $80,000, that figure flows two places: onto your Form 1040 as income (where the standard deduction and 20% QBI deduction apply before income tax), and onto Schedule SE, which charges 15.3% self-employment tax on 92.35% of it — about $11,304 in this example. That's the whole pipeline.

Keeping it clean

Run business income and expenses through a separate bank account so categorizing is easy at year-end, keep receipts for anything sizable, and don't pad — personal costs and your commute aren't deductible, and a loss year after year invites questions. Good records turn Schedule C from a chore into a few minutes, and make sure you claim every deduction you've earned.

Frequently asked questions

It's the IRS form where a sole proprietor or single-member LLC reports business income and expenses, attached to Form 1040. It calculates your net profit — the number your income tax and self-employment tax are based on.

Self-employed tax deductions →The home office deduction →Self-employment tax calculator →How much to set aside →

A planning estimate, not tax advice. Figures use IRS Rev. Proc. 2025-32 (2026). Confirm decisions with real money on the line with a CPA or enrolled agent.