What is Schedule C?
Schedule C (Form 1040), “Profit or Loss From Business,” is the tax form sole proprietors and single-member LLCs use to report how much their business made or lost. It's how your business income flows onto your personal tax return.
Who files a Schedule C?
If you're a sole proprietor or a single-member LLC (one that hasn't elected to be taxed as an S- or C-corp), you generally report your business's income and expenses on Schedule C. Freelancers, contractors, and side-business owners typically file one too.
How it works
Schedule C totals your business income, subtracts your business expenses by category, and arrives at your net profit or loss. That net number carries to your Form 1040 and is what your income tax and self-employment tax are calculated on.
The expense section is organized into lines (advertising, car and truck expenses, supplies, and so on). This is exactly why consistent bookkeeping categories matter — they line up with the form.
How bookkeeping makes it easy
If your transactions are categorized throughout the year, filling out Schedule C is mostly copying totals across. Bookkeeping software that maps categories to Schedule C lines can hand you a ready-made summary, so there's no year-end reconstruction from bank statements.
Frequently asked questions
Does a single-member LLC file Schedule C?
Usually, yes. By default a single-member LLC is a “disregarded entity” for taxes, so its income and expenses are reported on Schedule C of the owner's personal return — unless it has elected corporate taxation.
What expenses go on Schedule C?
Ordinary and necessary business expenses — advertising, software and subscriptions, contract labor, supplies, travel, a home office, and more — each on its designated line. Keeping receipts substantiates them.
Do I need Schedule C if my business lost money?
Yes. A net loss is still reported on Schedule C, and it may reduce your overall taxable income. You report the business result whether it's a profit or a loss.
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Start freeThis guide is general information, not tax or legal advice. Consult a qualified professional about your situation.