Schedule C

What is Schedule C?

Schedule C (Form 1040) is the IRS form that sole proprietors, freelancers, and single-member LLCs taxed as sole proprietors use to report the profit or loss from their business. It attaches to your personal Form 1040 and determines your business taxable income, which then flows into your self-employment tax (15.3% on net profit) and income tax calculation.

You file Schedule C once per year, due April 15 (with extensions available to October 15).

Who files Schedule C?

• US freelancers and independent contractors receiving 1099-NEC forms
• Sole proprietors with a registered business name (DBA)
• Single-member LLCs that have not elected S-corp or C-corp taxation
• Side-hustle income above $400 per year (the self-employment tax threshold)

If you received a 1099-NEC with an amount in Box 1, you file Schedule C. If you are paid as an employee only (W-2), you do not file Schedule C.

Key Schedule C expense categories (lines)

Line	Category	Common examples
9	Car and truck expenses	Business mileage at $0.67/mile (2024) or actual costs
11	Contract labor	Payments to 1099 subcontractors
13	Depreciation	Equipment written off over multiple years (or Section 179 immediate)
14	Employee benefits	Health insurance for employees
15	Insurance	Business liability, errors and omissions
17	Legal and professional services	Accountant fees, legal fees
18	Office expense	Supplies, postage
20	Rent or lease	Office rent, equipment leasing
22	Supplies	Consumable business supplies
25	Utilities	Business portion of phone, internet
27	Other expenses	Software subscriptions, domain names, etc.

The mileage deduction — the most under-captured deduction

Line 9 of Schedule C covers vehicle expenses. Most freelancers use the standard mileage rate rather than actual costs because it is simpler to calculate and often yields a higher deduction.

2024 IRS standard mileage rate: 67 cents per mile.

A freelancer driving 15,000 business miles per year: 15,000 x $0.67 = $10,050 deduction.

At a 22% marginal tax rate, that is $2,211 in tax savings. At a 24% marginal rate, $2,412.

The catch: you must have records. The IRS requires documentation of the date, business purpose, starting point, destination, and miles for each trip. Manual logs average 45% completion. QuickBooks Self-Employed’s background GPS captures approximately 78%. MileIQ captures approximately 94%.

The tax cost of using manual logging vs background GPS on 15,000 miles: $3,705 in missed deductions x 22% tax rate = $815 in additional taxes paid annually.

How accounting software prepares you for Schedule C

Well-configured accounting software does most of Schedule C’s categorisation work automatically:

• QuickBooks Self-Employed: The only tool with a dedicated Schedule C export that auto-maps categories to Schedule C lines. The TurboTax integration ($15/mo add-on) populates your return directly from QBSE data.
• FreshBooks: Categorises expenses but does not auto-map to Schedule C lines. Your accountant or TurboTax will handle the mapping at tax time.
• Wave: Categorises to accounting categories; you or your accountant translate to Schedule C lines.
• Bonsai: Basic expense categorisation; not Schedule C-mapped.

Source: IRS Schedule C instructions — irs.gov/instructions/i1040sc. IRS standard mileage rates — irs.gov/tax-professionals/standard-mileage-rates.