Schedule C: Profit or Loss From Business (2025)
Federal · IRS · Used for tax years 2025
Schedule C (Form 1040) reports profit or loss from a sole proprietorship. It lists business income, cost of goods sold, and expenses 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 primarily be for income or profit, and you must be involved regularly and continuously. A hobby, not-for-profit activity, or sporadic activity does not qualify as a business.
Schedule C also covers:
- Wages and related expenses of statutory employees.
- Income and deductions of certain qualified joint ventures.
- Certain amounts reported on 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 generally follow partnership rules, but qualified joint venture and community property exceptions may apply.
What you'll need
Have the information and forms that apply to your business ready:
- Business income and expense information, including gross receipts, returns and allowances, and other business income.
- Forms 1099 reporting business income. If you are a statutory employee, your Form W-2 with the “Statutory employee” box checked.
- Inventory, purchases, labor, materials, and other cost information if you report cost of goods sold.
- Vehicle-use information and evidence supporting your deduction if you claim car or truck expenses. Part IV asks for business, commuting, and other miles driven during 2025.
- Form 1098 or a similar statement if you report mortgage interest on business property.
Additional forms may be required, including:
- Form 8829 for actual expenses for business use of your home. It is not required when using the simplified method.
- Form 4562 for depreciation on property placed in service during 2025, depreciation on listed property, or a section 179 deduction.
- Form 7205 for the energy efficient commercial buildings deduction.
- Form 6198 if you have a business loss and some of your 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 you own. Include any additional forms or explanations required for your entries.
For instructions and the latest information, visit IRS.gov/ScheduleC.
Common mistakes
- Putting the wrong number on line D. Do not enter your SSN or another taxpayer’s EIN. If you do not have an EIN, leave line D blank.
- Reporting home business expenses in multiple places. Enter expenses for business use of your home only on line 30.
- Combining statutory employee and self-employment income. If you have both, use two separate Schedules C.
- Deducting vehicle costs twice. If you use the standard mileage rate, do not also deduct depreciation, rent or lease payments, or actual operating expenses. Do not deduct personal-use vehicle loan interest on Schedule C that you claimed on Schedule 1-A.
- Overlooking meal limits. In most cases, only 50% of business meal expenses are deductible. Do not include entertainment expenses on line 24b.
- Assuming every loss is fully deductible. A loss may be limited. If some investment is not at risk and you check line 32b, attach Form 6198.
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 one.
Do I report business income even if I did not receive a Form 1099?
Yes. The instructions say to report all income attributable to your trade or business from all sources.
What is the standard business mileage rate for 2025?
The rate is 70 cents per business mile. Eligibility rules apply. For an owned vehicle, you must have used the standard mileage rate in the first year you placed it in service. For a leased vehicle, you must use the rate for the entire lease period. You must use actual expenses if you used five or more vehicles simultaneously in your business.
Where do I claim expenses for business use of my home?
Report them on Schedule C, line 30, and nowhere else on Schedule C. Attach Form 8829 unless you use the simplified method. Simplified method filers use the worksheet in the instructions and enter the square footage of their home and the part used for business.