What is 1040 Schedule C, and how does it connect to your personal tax return?

schedule c instructions is an attachment to Form 1040 used to report profit or loss from a sole proprietorship or freelance business. It transfers the net income calculated on Schedule C directly to your main tax return, affecting your taxable income and self-employment tax. This form is required for anyone earning money from independent work, side gigs, or small businesses. It documents income, business expenses, and relevant deductions. Properly completing Schedule C helps reduce tax liability, ensures transparency, and keeps your filings compliant with IRS rules for self-employed individuals.