Part I. Income

Except as otherwise provided in the Internal Revenue Code, gross income includes income from whatever source derived. In certain circumstances, however, gross income does not include extraterritorial income that is qualifying foreign trade income. Use Form 8873 to figure the extraterritorial income exclusion. Report it on Schedule C as explained in the Instructions for Form 8873.

If you were a debtor in a chapter 11 bankruptcy case during 2025, see Chapter 11 Bankruptcy Cases in the Instructions for Form 1040 (under Income ) and the Instructions for Schedule SE.

Be sure to report all income attributable to your trade or business from all sources. You may receive one or more Forms 1099 from people who are required to provide information to the IRS listing amounts that may be income you received as a result of your trade or business activities. The following is a list of some of the common Forms 1099.

• 1099-MISC. For more information about what is reported on Form 1099-MISC, see the Instructions for Recipient included on that form.

If you received one or more Forms 1099-NEC, be sure line 1 includes amounts properly shown on your Forms 1099-NEC. If the total amounts that were reported in box 1 of Forms 1099-NEC are more than the total you are reporting on line 1, attach a statement explaining the difference.

Statutory employees. If you received a Form W-2, and the "Statutory employee" box in box 13 of that form was checked, report your income and expenses related to that income on Schedule C. Enter your statutory employee income from box 1 of Form W-2 on line 1 of Schedule C and check the box on that line. Social security and Medicare tax should have been withheld from your earnings; as a result, you do not owe self-employment tax on these earnings. Statutory employees include full-time life insurance agents, certain agent or commission drivers and traveling salespersons, and certain homeworkers.

If you had both self-employment income and statutory employee income, you must file two Schedules C. You cannot combine these amounts on a single Schedule C.

Note: Statutory employees information doesn’t apply to Form 1040-SS filers.

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• 1099-NEC. For more information about what is reported on Form 1099-NEC, see the Instructions for Recipient included on that form.

• 1099-K. For more information about what is reported on Form 1099-K, see the Instructions for Payee included on that form and go to IRS.gov/Gig .

Income you report on Schedule C may be qualified

TIP business income and entitle you to a deduction on Form

1040 or 1040-SR, line 13a. See Forms 8995 and 8995-A for more information.

Line 1 Enter gross receipts from your trade or business. Be sure to check any Forms 1099 you received for business income that must be reported on this line.

Income you report on Schedule C may be qualified

TIP business income and entitle you to a deduction on Form

1040 or 1040-SR, line 13a. See Forms 8995 and 8995-A for more information.

Qualified joint ventures should report rental real estate