If you are self-employed or work as an independent contractor, filing your Schedule C accurately is essential to reporting your business income and claiming allowable deductions.
What Is a Schedule C?
Schedule C is used to report income or loss from a business you operated or a profession you practiced as a sole proprietor or single-member LLC. This includes freelancers, consultants, real estate professionals, gig workers, and independent contractors.
Business Income to Report
You must report all business income, including:
- Income reported on Forms 1099-NEC
- Income reported on Forms 1099-K
- Cash, check, Zelle, Venmo, PayPal, Stripe, or Square payments
- Income not reported on any tax form
- Refunds or other business-related income
Common Schedule C Business Expenses
The checklist includes space to report the most common deductible business expenses, including:
- Advertising and marketing
- Commissions and fees
- Contract labor and subcontractors
- Office expenses and supplies
- Professional fees such as CPA, legal, and consulting services
- Bank and credit card processing fees
- Software subscriptions
- Licenses and permits
- Education and training
- Insurance, excluding personal health insurance
- Repairs and maintenance
- Rent for office or equipment
- Utilities and business telephone expenses
- Uniforms with a company logo
- Wages paid to employees and payroll taxes
- Tools and equipment that are not capitalized
- Travel expenses, excluding meals
- Meals, subject to IRS limitations
- Other ordinary and necessary business expenses
Proper documentation is required for all expenses claimed.
Home Office Deduction
If you use part of your home for business, you may qualify for the home office deduction. The space must be used exclusively and regularly for business purposes.
Information needed includes:
- Total square footage of your home
- Square footage used for business
- Real estate taxes
- Mortgage interest or rent paid
- Homeowners or renters insurance
- Utilities such as electricity, gas, and water
- Other applicable home-related expenses
Home office deductions are subject to heightened IRS scrutiny and must meet strict requirements.
Car and Truck Expenses
If you use a vehicle for business, you may be able to deduct vehicle expenses using either the standard mileage method or actual expenses.
Information required includes:
- Date the vehicle was placed in service
- Purchase price of the vehicle
- Business mileage and personal mileage
- Mileage logs or other substantiating records
- Evidence such as calendars, appointment records, or mileage tracking apps
Commuting mileage is not deductible.
Fixed Assets and Equipment Purchases
Fixed assets are items with a useful life greater than one year and a cost above the IRS capitalization threshold.
Examples include:
- Vehicles
- Computers and office equipment
- Machinery and tools
- Furniture
- Specialized business equipment
For each asset, you will need:
- Description of the asset
- Date placed in service
- Cost
- Business use percentage
These items may be depreciated over time or may qualify for special expensing elections.
Why Using a Checklist Matters
Using a structured Schedule C checklist helps:
- Ensure all income is reported
- Properly categorize business expenses
- Identify deductions that require additional documentation
- Reduce follow-up questions during tax preparation
- Improve accuracy and audit readiness
Important Reminder
Pelican Tax CPA prepares tax returns based on information provided by the client. Clients are responsible for maintaining adequate records to substantiate income and expenses.
Certain deductions, including home office and vehicle expenses, are subject to increased IRS scrutiny.
Download the Schedule C Checklist
Use the link below to download our Schedule C checklist and complete it before submitting your tax documents.
Click Here To Download the Schedule C Checklist PDF
If you have questions while completing the checklist or need guidance on deductible expenses, our team is here to help.
Need Help With Your Schedule C?
Pelican Tax CPA provides tax preparation and advisory services tailored to self-employed individuals and independent contractors.
Contact us today to schedule a consultation.
