Why this matters

Many gig workers are treated as self-employed for federal tax purposes. Filing Schedule C documents your business income and expenses; it also determines whether you owe self-employment tax and estimated tax payments. See the IRS overview of Schedule C for official guidance: IRS – About Schedule C (Form 1040).

Step-by-step: report gig income on Schedule C

  1. Gather all income records
  • Collect 1099s (1099-NEC for nonemployee compensation, 1099-K from payment processors) and your own logs or bank deposits. Even if you don’t receive a 1099, the IRS still expects you to report all income. See IRS pages for Form 1099-NEC and Form 1099-K for details: Form 1099-NEC, Form 1099-K.
  1. Separate business from personal
  • Only deduct business expenses. Keep separate bank accounts or cards if possible. If an activity lacks a profit motive or is a hobby, different rules apply and you may not file Schedule C.
  1. Track deductible expenses
  • Common gig-worker deductions: vehicle costs (standard mileage or actual expenses), supplies and tools, phone and internet (business portion), platform fees, advertising, insurance, and home office (if you meet IRS rules). Choose simplified vs actual methods where applicable and keep receipts. For a detailed list of often-missed write-offs, see our internal guide: Schedule C Deductions You Might Be Missing.
  1. Complete Schedule C
  • Report gross receipts on Line 1, subtract returns and allowances, list expenses in the proper expense lines, and calculate net profit or loss. If you operate as a sole proprietor, this net amount flows to Form 1040. For tips and common pitfalls when filing, review: Filing Schedule C for Sole Proprietors: Tips and Pitfalls.
  1. Compute self-employment tax and estimated taxes
  • If your net earnings from self-employment are $400 or more, you generally owe self-employment tax (reported on Schedule SE). You may also need to make quarterly estimated tax payments to avoid penalties. For federal rules and calculators, see the IRS pages on Schedule SE (Self-Employment Tax) and Estimated Taxes.

Practical recordkeeping tips

  • Keep a mileage log (date, miles, business purpose) or use a reliable mileage-tracking app. Retain receipts, invoices, and bank statements for at least three years—longer if you have complex issues.
  • Use accounting or tax software built for freelancers. That simplifies generating year-end profit/loss statements and tracking deductible categories.

Real-world examples

  • Rideshare driver: track platform payouts, tips, tolls, and choose between the standard mileage rate or actual car expenses. Recording tolls and fees separately avoids missed deductions.
  • Freelancer: deduct software subscriptions, advertising, bank fees for business accounts, and a portion of home internet if used for work.

When to consider a different business structure

  • If your gig grows (higher income, employees, or material liability), forming an LLC or electing S‑Corp status can change how you’re taxed and how you handle payroll. These choices have trade-offs—consult a CPA or attorney for personalized advice.

Common mistakes to avoid

  • Not reporting income because a platform didn’t send a 1099.
  • Mixing personal and business expenses without clear records.
  • Using the wrong deduction method for vehicle or home office expenses.

Additional resources and internal links

Professional note and disclaimer

In my experience advising gig workers, good recordkeeping is the single best step to lower tax risk and maximize legitimate deductions. This article is educational and does not replace personalized tax advice. Consult a qualified tax professional for specific questions about your situation.

Authoritative sources