Quick definition

The federal form self-employed workers use to report business income and expenses, including the mileage deduction.

Schedule C is the IRS form titled "Profit or Loss from Business." If you are self-employed, an independent contractor, or run a sole proprietorship, this is where you report your business income and your business expenses. The mileage deduction lives on line 9.

When you file it

Schedule C is filed with your annual federal return (Form 1040). One Schedule C per business. If you have two unrelated businesses, you file two Schedule Cs.

Where mileage shows up

Part II of Schedule C is "Expenses." Line 9, "Car and truck expenses," is where you put your mileage deduction. Part IV asks four vehicle-specific questions: when you placed the vehicle in service, total business miles, total commuting miles, and total other miles. See the full Schedule C walkthrough.

Why it matters

Schedule C income is also subject to self-employment tax on Schedule SE. The mileage deduction reduces both income tax AND self-employment tax, which is why it is more valuable than the same dollar of deduction on a W-2 worker's return (when that was still possible. The W-2 mileage deduction is permanently gone).

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