Schedule C (Form 1040) is a tax form used to report income or loss from a business or profession that you operate as a sole proprietor. As a freelancer, if you are self-employed and operate your business as a sole proprietor, you will need to file a Schedule C as part of your personal income tax return.
Schedule C is important to freelancers because it allows them to deduct business expenses from their taxable income, which can help reduce their tax liability. Freelancers can deduct expenses such as home office expenses, supplies, equipment, travel expenses, and professional development courses, among others. However, it’s important to ensure that these deductions are legitimate and directly related to your freelance business.
In addition to reporting income and deductions, Schedule C also calculates the net profit or loss from your freelance business. This amount is then transferred to your personal income tax return (Form 1040), where it is added to any other sources of income you may have.