Schedule C for Gig Workers: Complete Line-by-Line Guide

Schedule C is the most important tax form for gig workers. This is where you report your business income from platforms like Uber, DoorDash, Instacart, and Upwork, deduct business expenses, and calculate your net profit. Understanding Schedule C is essential for accurate tax filing and maximizing your deductions.

This comprehensive guide provides line-by-line instructions for completing Schedule C in 2026, with specific examples for gig workers, common mistakes to avoid, and tips for maximizing your deductions.

What is Schedule C?

Schedule C (Form 1040), "Profit or Loss from Business," is an IRS tax form used by sole proprietors and single-member LLCs to report business income and expenses. As a gig worker, you're considered a sole proprietor, so you must file Schedule C.

Key Facts About Schedule C

  • Purpose: Calculate net profit or loss from self-employment
  • Who files: Anyone with self-employment income (gig workers, freelancers, contractors)
  • Attached to: Form 1040 (your main tax return)
  • Used for: Calculating both income tax and self-employment tax
  • Sections: 5 parts (General Info, Income, Expenses, Cost of Goods Sold, Vehicle Info)

?? Why Schedule C Matters

Schedule C is where you reduce your tax bill through deductions. Every legitimate business expense you claim reduces your net profit, which reduces both your income tax and self-employment tax. Proper completion can save you thousands of dollars.

Part I: Income (Lines 1-7)

Part I is where you report your gross income from gig work before deducting expenses.

Line 1: Gross Receipts or Sales

Enter your total income from all 1099-NEC forms. If you have multiple platforms, add them together.

Example:

  • Uber: $30,000
  • Lyft: $15,000
  • DoorDash: $10,000
  • Line 1 Total: $55,000

Line 2: Returns and Allowances

For gig workers, this is usually blank. This line is for businesses that issue refunds to customers. Rideshare and delivery drivers don't use this line.

Line 3: Subtract Line 2 from Line 1

For most gig workers, this equals Line 1 since Line 2 is blank.

Example: $55,000 - $0 = $55,000

Line 4: Cost of Goods Sold

For gig workers, this is usually blank. This is only for businesses that sell physical products with inventory (not applicable to rideshare, delivery, or freelancing).

Line 5: Gross Profit

Subtract Line 4 from Line 3. For most gig workers, this equals Line 3.

Example: $55,000 - $0 = $55,000

Line 6: Other Income

Any other business income not reported on Line 1. For example, referral bonuses not included on your 1099-NEC. Usually blank for most gig workers.

Line 7: Gross Income

Add Lines 5 and 6. This is your total gross income before expenses.

Example: $55,000 + $0 = $55,000

This is the number you'll subtract expenses from to get net profit.

Part II: Expenses (Lines 8-27)

Part II is where you deduct business expenses. This is the most important section for reducing your tax bill. Here are the most relevant lines for gig workers:

Line 9: Car and Truck Expenses

Most important line for drivers! Enter your vehicle expenses using either standard mileage or actual expense method.

Standard Mileage (Recommended): Business miles $0.67 (2026 rate)

Example: 20,000 miles $0.67 = $13,400

See our mileage calculator and deductions guide.

Line 11: Contract Labor

Usually blank for gig workers unless you hired someone to help with your business.

Line 15: Insurance (Other Than Health)

Commercial rideshare insurance add-ons, business liability insurance, or roadside assistance plans. Don't include health insurance (that goes on Form 1040, not Schedule C).

Line 18: Office Expense

Office supplies, software subscriptions (for freelancers), or other office-related costs. For delivery drivers, this might include insulated bags or phone accessories.

Line 22: Supplies

Business supplies not included elsewhere:

  • Cleaning supplies for your car
  • Water/snacks for passengers
  • Hand sanitizer, masks
  • Air fresheners

Line 24a: Travel

Usually blank for local gig workers. Only use if you traveled away from home overnight for business (rare for rideshare/delivery).

Line 24b: Deductible Meals

Meals during work hours (50% deductible). Example: $20 lunch during long shift = $10 deduction. Meals for passengers/clients are 100% deductible.

Line 25: Utilities

Business portion of phone and internet bills:

Example: $100/month phone 80% business use 12 months = $960

Line 27a-27b: Other Expenses

List expenses that don't fit in other categories. Common for gig workers:

  • Car washes: $300
  • Tolls and parking: $200
  • Bank fees: $100
  • Tax preparation fees: $200
  • Professional licenses: $150

Line 27a Total: $950 (sum of all other expenses)

Line 28: Total Expenses

Add Lines 8 through 27a. This is your total business expenses.

Example Total Expenses:

  • Car expenses (Line 9): $13,400
  • Supplies (Line 22): $200
  • Utilities (Line 25): $960
  • Other expenses (Line 27a): $950
  • Line 28 Total: $15,510

Part III: Calculate Net Profit (Lines 29-31)

This is where you calculate your net profitthe amount you actually pay taxes on.

Line 29: Tentative Profit or Loss

Subtract Line 28 (expenses) from Line 7 (gross income).

Example: $55,000 - $15,510 = $39,490

Line 30: Expenses for Business Use of Home

Home office deduction (if eligible). Most delivery drivers don't qualify. Freelancers who work from home often do. Use Form 8829 or simplified method ($5/sq ft, max 300 sq ft).

Line 31: Net Profit or (Loss)

Subtract Line 30 from Line 29. This is your net profitthe most important number on Schedule C.

Example: $39,490 - $0 = $39,490

This amount is used to calculate:

  • Self-employment tax (Schedule SE)
  • Income tax (Form 1040)

Part IV: Information on Your Vehicle

If you claimed vehicle expenses on Line 9, you must complete Part IV.

Line 43: When Did You Place Vehicle in Service?

Enter the date you started using the vehicle for business. If you bought it before starting gig work, use the date you started driving for Uber/Lyft/etc.

Line 44a-44d: Mileage Information

Critical for IRS compliance! You must provide:

  • 44a: Total miles driven during the year (business + personal)
  • 44b: Business miles (what you're deducting)
  • 44c: Commuting miles (usually 0 for gig workers)
  • 44d: Other miles (personal, non-business)

Example: 44a: 25,000 total | 44b: 20,000 business | 44c: 0 | 44d: 5,000 personal

Line 45: Do You Have Evidence to Support Your Deduction?

Check Yes. This means you have a mileage log (app or manual) to prove your business miles. Without evidence, the IRS can disallow your deduction.

Line 46: Is the Evidence Written?

Check Yes. Your mileage tracking app or manual log counts as written evidence.

Part V: Other Expenses (Line 48)

Part V is where you detail the "Other Expenses" from Line 27a. List each expense type and amount.

Example: Part V Breakdown

Car washes: $300

Tolls and parking: $200

Bank fees: $100

Tax preparation: $200

Professional license: $150

Total (Line 48): $950

Business Codes for Gig Workers

On the top of Schedule C, you'll enter a business code (NAICS code) that describes your primary business activity. Here are the most common codes for gig workers:

Rideshare Drivers

Code: 485310

Taxi and Limousine Service (includes Uber, Lyft)

Delivery Drivers

Code: 492210

Local Messengers and Local Delivery (includes DoorDash, Instacart, Uber Eats)

Freelancers/Consultants

Code: 541990

All Other Professional, Scientific, and Technical Services (includes Upwork, Fiverr)

Other Services

Code: 812990

All Other Personal Services (TaskRabbit, Handy, etc.)

Note: The business code doesn't affect your taxesit's just for IRS statistics. Choose the one that best describes your primary activity.

Common Mistakes to Avoid

? Not Tracking Mileage

Mileage is the #1 deduction for drivers. Without a mileage log, you can't claim this deduction. Start tracking from day one using apps like Stride or MileIQ.

? Mixing Standard Mileage and Actual Expenses

You can't use both methods in the same year. If you use standard mileage (67/mile), you can't also deduct gas, insurance, or repairs. Choose one method and stick with it.

? Forgetting to Deduct Expenses

Many gig workers only report income and forget to deduct expenses. Review our complete deductions guide to ensure you're claiming everything.

? Deducting Personal Expenses

Only deduct the business portion of mixed-use items. For example, if your phone is 80% business, only deduct 80% of the bill. Deducting 100% of personal expenses is a red flag.

? Math Errors

Double-check all calculations. Use tax software to avoid math errorsit does the calculations automatically.

Complete Schedule C Example

Uber/Lyft Driver Example

Part I: Income

Line 1 - Gross receipts: $55,000

Line 7 - Gross income: $55,000

Part II: Expenses

Line 9 - Car expenses (20,000 mi $0.67): $13,400

Line 22 - Supplies (water, cleaning): $200

Line 25 - Utilities (phone 80% business): $960

Line 27a - Other (car washes, tolls, fees): $950

Line 28 - Total expenses: $15,510

Part III: Net Profit

Line 29 - Tentative profit: $39,490

Line 30 - Home office: $0

Line 31 - Net profit: $39,490

This $39,490 net profit is used to calculate self-employment tax (~$5,580) and income tax.

Related Resources

How to File Taxes as a Gig Worker

Complete filing guide including Schedule C walkthrough and next steps.

View Filing Guide

Gig Worker Tax Deductions

Complete list of deductions to claim on Schedule C Part II.

View Deductions Guide

1099-NEC Explained

Understand the income form you'll use to complete Schedule C Line 1.

View 1099-NEC Guide

Self-Employment Tax Calculator

Calculate SE tax on your Schedule C net profit (Line 31).

Calculate SE Tax

Frequently Asked Questions

Master Schedule C to Maximize Your Tax Savings

Schedule C is where gig workers reduce their tax bills through legitimate business deductions. By understanding each line and claiming all eligible expenses, you can save thousands of dollars per year. The key is proper record-keeping and knowing what you can deduct.

Use tax software to guide you through Schedule C step-by-step, or consult a CPA if you have complex situations. Track your mileage religiously, save all receipts, and review our deductions guide to ensure you're not leaving money on the table. Your net profit on Line 31 determines your entire tax billmake sure it's as low as legally possible!