Schedule C: Profit or Loss From Business (2024)
Federal · IRS · Used for tax years 2024
Schedule C (Form 1040) reports profit or loss from a sole proprietorship. It lists business income, expenses, and cost of goods sold to calculate net profit or loss.
Who files this form
Use Schedule C to report income or loss from a business you operated or a profession you practiced as a sole proprietor. The activity must have income or profit as its primary purpose, and you must take part with continuity and regularity. A hobby, not-for-profit activity, or sporadic activity does not qualify as a business.
Schedule C also covers:
- Wages and related expenses as a statutory employee.
- Income and deductions from certain qualified joint ventures.
- Certain amounts reported on Forms 1099, including Forms 1099-MISC, 1099-NEC, and 1099-K.
If you are the sole member of a domestic LLC, generally file Schedule C, or Schedule E or F if applicable, unless you elected to treat the LLC as a corporation.
Partnerships generally file Form 1065 instead. Spouses who jointly own and operate a business may qualify for the qualified joint venture or community property exceptions described in the instructions.
What you'll need
Have the information and forms that apply to your business ready:
- Business details: Your business activity, business code, accounting method, address, and EIN if applicable.
- Income information: Gross receipts or sales, returns and allowances, other business income, and relevant Forms 1099. Have your Form W-2 ready if its “Statutory employee” box is checked.
- Expense information: Amounts for the business expense categories on Schedule C. Include Form 1098 or a similar statement if you received one for business mortgage interest.
- Inventory information: Beginning and ending inventory, purchases, labor costs, materials, and other costs if you report cost of goods sold.
- Vehicle information: The date your vehicle entered business service, business and other mileage, and evidence supporting the deduction.
- Travel records: Even when using the standard meal allowance, keep records proving the time, place, and business purpose of your travel.
Additional forms may be needed. Examples include Form 8829 for actual home-business expenses, Form 4562 for applicable depreciation or section 179 deductions, and Form 6198 if you have a business loss and some investment is not at risk.
How to file
Attach Schedule C to Form 1040, 1040-SR, 1040-SS, 1040-NR, or 1041, as applicable. Complete a separate Schedule C for each business.
Attach any required supporting forms and explanations. For example, attach Form 8829 for business use of your home unless you use the simplified method.
The supplied text does not give a mailing address or Schedule C e-filing steps. For instructions and the latest information, visit IRS.gov/ScheduleC.
Common mistakes
- Leaving out business income: The instructions remind you to report income from all sources attributable to your business. Check the Forms 1099 you received.
- Entering the wrong number on line D: Do not enter your SSN or another taxpayer’s EIN. Leave line D blank if you do not have an applicable EIN.
- Reporting home-business expenses twice: Enter these expenses only on line 30, not elsewhere on Schedule C.
- Combining statutory employee and self-employment income: If you have both, file two Schedules C rather than combining them on one.
- Deducting vehicle costs twice: If you use the standard mileage rate, do not also deduct depreciation, rent or lease payments, or actual operating expenses for that vehicle.
- Deducting payments to yourself: Do not include amounts paid to yourself in wages on line 26 or labor costs on line 37.
- Overlooking loss limits: The instructions remind you that a loss on line 31 may be subject to an excess business loss limitation. See Form 461 and its instructions.
Questions people ask
Do I need a separate Schedule C for each business?
Yes. If you owned more than one business, complete a separate Schedule C for each business.
What is the business standard mileage rate for 2024?
The rate is 67 cents per business mile. To use it, you must meet the conditions in the line 9 instructions. Add parking fees and tolls to the mileage amount.
Can I deduct business meals?
Generally, you can deduct 50% of qualifying business meal expenses. The instructions describe exceptions. Do not include entertainment expenses on line 24b.
Can I claim expenses for business use of my home?
You may be able to claim certain expenses, subject to limitations. Use Form 8829 or elect the simplified method, and report the deduction on line 30.
Can my spouse and I elect qualified joint venture treatment?
You can elect this treatment for an unincorporated business if you are its only owners, each materially participates, and you file a joint return. A business owned through an LLC does not qualify for this election. Divide the business items according to your respective interests and each file a separate Schedule C or F, as applicable.