If you are filing a federal income tax return during the 2026 filing season, you are generally preparing your return for tax year 2025. That means you should use the 2025 Schedule C and its instructions.
Schedule C reports the income or loss from a business you operated, or a profession you practiced, as a sole proprietor. It is also commonly used by freelancers, independent contractors, and owners of single-member LLCs treated as disregarded entities for federal income tax purposes.
What Changed on the 2025 Schedule C?
The IRS instructions highlight several changes that can affect Schedule C filers.
Standard Mileage Rate
For business miles driven during 2025, the standard mileage rate is 70 cents per mile.
The standard mileage method is not automatic. Eligibility rules apply, and you still need records supporting your business miles.
Line 27a and Line 27b
The current form separates two expense lines:
- Line 27a: energy efficient commercial buildings deduction
- Line 27b: other expenses itemized in Part V and carried over from Line 48
If you are using an older checklist or prior-year tax software as a reference, confirm that your other expenses flow to Line 27b, not Line 27a.
Bonus Depreciation
Certain qualified property acquired and placed in service after January 19, 2025, can qualify for 100% bonus depreciation. The IRS instructions note that you can elect to use the prior phase-down rates instead.
This is an area where dates, asset type, and elections matter. Review the Form 4562 instructions or work with a qualified tax professional before claiming the deduction.
Section 179 Limit
Beginning in 2025, the maximum section 179 expense deduction is $2.5 million. The limit is reduced when the cost of section 179 property placed in service during the year exceeds $4 million.
Most freelancers will never approach those limits, but the change can matter for businesses making larger equipment purchases.
Domestic Research and Experimental Expenses
Beginning in 2025, taxpayers can deduct domestic research and experimental expenses as current business expenses or elect to capitalize and amortize them over a period of at least 60 months.
What Did Not Change?
The core workflow remains the same:
- Report gross receipts and sales, including business income that did not generate a Form 1099.
- Subtract returns, allowances, and cost of goods sold when applicable.
- Categorize ordinary and necessary business expenses.
- Calculate net profit or loss on Line 31.
- Use Schedule SE when required to calculate self-employment tax.
Your records matter more than your Forms 1099 alone. A payment can be taxable business income even if no payer had to send a form. A Form 1099-K can also include overlapping or nonbusiness transactions that need to be reconciled.
Recordkeeping Still Matters
Good records help you:
- Identify all business receipts
- Track deductible expenses
- Substantiate items on your return
- Separate business costs from personal spending
- Support vehicle, meal, travel, and home office deductions
The IRS allows you to choose a recordkeeping system suited to your business, but it must clearly show income and expenses.
Prepare Before You File
Simple-C helps organize business transactions into Schedule C categories throughout the year. That gives you a cleaner breakdown to review before preparing your return or sending your records to a tax professional.
For a full walkthrough, read How to Fill Out Schedule C in 2026.
This article provides general information, not tax advice. It discusses the 2025 Schedule C used for returns filed during the 2026 filing season. Review IRS instructions for your tax year.