Core Insights - The article emphasizes the importance of Schedule C for freelancers, side-hustlers, and small business owners in reporting income and expenses for tax purposes [2][3] Group 1: Understanding Schedule C - Schedule C is an attachment to Form 1040, used to report income earned and business expenses incurred during the tax year [3] - The IRS uses Schedule C to determine net profit or loss, which affects self-employment tax calculations [3] Group 2: Deductions on Schedule C - Deductions can significantly reduce taxable profit, and common write-offs include advertising, vehicle expenses, commissions, office supplies, insurance, travel, meals, and home office expenses [5][7] - Keeping receipts is crucial for substantiating deductions in case of an IRS audit [5] Group 3: Filing Requirements - Individuals typically need to file Schedule C if they operate a business as a sole proprietor or single-member LLC, especially if net earnings exceed $400 [8][9] - Statutory employees also use Schedule C to report income and expenses [9] Group 4: Filing Process - The process of filling out Schedule C involves gathering records, calculating gross income, determining cost of goods sold, itemizing expenses, and calculating net profit or loss [15] - Tax preparation software can simplify the filing process, while hiring a tax professional may provide tailored advice and ensure accuracy [10][11] Group 5: Who Should Not File Schedule C - W-2 employees and individuals engaged in hobby activities rather than profit-driven businesses should not file Schedule C [16] - Partnerships file Form 1065 instead of Schedule C [16]