Schedule C (Profit or Loss from Business)
The form used by US-resident single-member LLC owners to report business income on personal Form 1040.
Definition
Schedule C is filed with personal Form 1040 by US-resident sole proprietors and single-member LLC owners. The schedule reports the business's income and expenses and computes net profit or loss. The net amount flows to the personal return as ordinary income.
Context
Used by US-resident single-member LLC owners. Non-resident single-member LLC owners do NOT file Schedule C; they file Form 5472 + pro forma Form 1120 at the LLC level instead.
Example
A US-resident founder of a Delaware single-member LLC files Schedule C with their Form 1040 reporting the LLC's $80,000 net profit. The $80,000 flows to the personal return.
Common pitfalls
- Confusing Schedule C (US-resident path) with Form 5472 (non-resident path); the two are mutually exclusive based on residency.
- Schedule C subjects net profit to self-employment tax (15.3%) for US-resident filers.