🧾 Schedule C for the self-employed

If you run your own business, freelance, or work as an independent contractor, you report that income and your business expenses on Schedule C, attached to your Form 1040. Your net profit, not your gross income, is what gets taxed.

Common Schedule C deductions

Any ordinary and necessary business expense can qualify. The most common:

• Home office: if part of your home is used regularly and only for business, you can deduct a share of rent or mortgage interest, utilities and insurance (Form 8829). The simplified method is $5 per square foot, up to 300 square feet.
• Vehicle: business miles at the IRS standard mileage rate, or the business share of actual costs. Keep a mileage log.
• Equipment and technology: computers, phones, software and tools. Often fully deductible in the year you buy them through Section 179 or bonus depreciation.
• Professional services: legal, accounting and consulting fees.
• Marketing: website costs, business cards, ads and promotional materials.
• Business insurance: liability and other business policies.
• Health insurance: self-employed people can generally deduct premiums for themselves and their family (on Schedule 1, not Schedule C).
• Retirement: SEP-IRA contributions of up to 25% of compensation, which works out to about 20% of net self-employment earnings for a sole proprietor (2026 maximum $72,000), or a Solo 401(k) or SIMPLE IRA.

The 20% QBI deduction

Eligible self-employed people can deduct up to 20% of their qualified business income under Section 199A. The One Big Beautiful Bill Act made this deduction permanent. Income limits and phase-outs apply to certain service businesses.

Need help keeping the books? See our monthly bookkeeping plans.

General education only, not advice for your specific situation. Figures checked October 2026. Tax law changes, so confirm current figures at IRS.gov or ask us.