How to fill out Schedule C in 2026

Step 1: Answer the header questions on lines A to J

Answer the header questions on lines A to J first, because line G and line I change what the IRS expects from the rest of the form.³

For line I, you'll owe a Form 1099-NEC for 2026 payments to any contractor you paid $2,000 or more, up from $600 for 2025.⁴ Total each contractor's payments for the year before you answer.

For line A, two activities can count as one business, and the Schedule C guide covers when they do. For line D, a sole proprietor with no employees usually does not need an EIN, so leave it blank if you don't have one.

Step 2: Figure cost of goods sold on lines 33 to 42

Figure cost of goods sold on lines 33 to 42 only if you make or buy products to sell. Service businesses skip Part III and leave line 4 blank.

Count your inventory on December 31 before you start, because line 41 needs it.

Step 3: Report your income on lines 1 to 7

Report your income on lines 1 to 7, starting with every dollar the business took in on line 1, whether or not a Form 1099 came with it.

Total your invoices or deposits for line 1, then check them against the forms you received. For 2026, fewer clients send a Form 1099-NEC, and the Schedule C guide explains why. A statutory employee who also has other self-employment income files two Schedules C.

Step 4: Fill in your vehicle details on lines 43 to 47b

Fill in your vehicle details on lines 43 to 47b if you claim car or truck expenses on line 9 and do not have to file Form 4562. If you claim depreciation on the car, those questions go on Form 4562 instead.

For 2026, business miles from January 1 to June 30 are deducted at 72.5 cents a mile and miles from July 1 to December 31 at 76 cents, plus parking and tolls. A 2025 return uses 70 cents.⁵

Line 44a asks for one total, so keep a mileage log dated by trip, and the IRS mileage rate guideshows how to split it at June 30. The guide to car and truck expenses on Schedule C covers choosing between the standard rate and actual costs.

Step 5: List other expenses on line 48

List other expenses on line 48 when a business cost has no line of its own in Part II, then carry the total to line 27b. The instructions name amortization, business bad debts, business start-up costs, and items under the de minimis safe harbor for tangible property, and each item gets a description and an amount.

The line 48 total goes on line 27b, not 27a. Line 27a is only for the energy efficient commercial buildings deduction.

Step 6: Enter your expenses on lines 8 to 30

Enter your expenses on lines 8 to 30, putting each cost on the one line that fits it and home office costs only on line 30.

For line 16b, the IRS splits car loan interest by use. You deduct the business share on Schedule C and may deduct the personal share on Schedule 1-A.

For line 30, the simplified method is $5 a square foot of the space you use for business, up to 300 square feet, so $1,500 at most. Those are the 2025 figures, and the IRS still lists them for 2026. The home office deduction guide covers the regular method on Form 8829.

For what counts on each line, see the 1099 deductions list.

Step 7: Figure your net profit or loss on lines 31 and 32

Figure your net profit or loss on line 31 by subtracting line 30 from line 29, then check line 32 only if the result is a loss.

If you checked the statutory employee box on line 1, your line 31 amount goes to Schedule 1, line 3, but not to Schedule SE. The self-employment tax guide explains what Schedule SE does with line 31.