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Schedule C and Schedule SE for Delivery and Rideshare Drivers: A Line-by-Line Walkthrough
Your gig income goes on Schedule C (gross receipts on line 1, car expenses on line 9, other costs below that), the profit on line 31 carries to Schedule SE, half of the self-employment tax comes back out on Schedule 1 line 15, and the Form 8995 QBI deduction can take up to 20% off what remains. Below, one driver's 2026 numbers go through every step.
Tax software asks questions in plain English and fills these forms behind the scenes. Understanding the forms lets you spot a missing number before it costs you. The driver below is a single filer with $62,000 of gross receipts (including $7,000 of tips), 9,000 business miles from January to June, 10,000 from July to December, and $1,300 of other expenses such as the business share of a phone plan and delivery bags. Every dollar amount below came from the same engine as our 1099 gig tax calculator.
Step 1: Schedule C, income and expenses
| Line | What goes there | This driver |
|---|---|---|
| 1 | Gross receipts: everything customers and platforms paid you, including tips and bonuses | $62,000.00 |
| 9 | Car and truck expenses: 9,000 miles at 72.5 cents plus 10,000 miles at 76 cents | $14,125.00 |
| 27b | Other expenses, carried from Part V line 48 (the itemized list of everything not given its own line) | $1,300.00 |
| 28 | Total expenses before home-office costs | $15,425.00 |
| 31 | Net profit (or loss) | $46,575.00 |
Other expense lines you may use as a driver include commissions and fees (line 10), insurance other than health (line 15), interest (line 16; the 2026 draft adds a separate vehicle-loan line), supplies (line 22), and utilities (line 25). Which items go where is covered in the deductions guide. If you use the standard mileage rate you skip the depreciation line; only the actual-expense method needs Form 4562 and line 13.
Part IV, the vehicle questions. When you claim car expenses on line 9 and do not have to file Form 4562, Part IV asks when you placed the vehicle in service for business, then how many of your total miles were for business, commuting, and other, whether the car was available for personal use off duty, whether you have another vehicle, and whether you have evidence, and if so, whether it is written. This driver would enter 19,000 on line 44a. Your mileage log supplies every answer; see the mileage log guide. The two questions at the top of the form, I and J, ask whether you made payments requiring Forms 1099 and whether you filed them.
Step 2: Schedule SE, self-employment tax
Line 31 of Schedule C goes to Schedule SE line 2, and also to Schedule 1 line 3 as business income. Schedule SE then turns net profit into Social Security and Medicare tax.
| Schedule SE line | What it does | This driver |
|---|---|---|
| 2 and 3 | Net profit from Schedule C | $46,575.00 |
| 4a and 4c, then 6 | Multiply by 92.35%. Under $400, stop: no self-employment tax | $43,012.01 |
| 7 | Social Security wage base for 2026 | $184,500 |
| 10 | 12.4% Social Security on the smaller of line 6 or line 9 | $5,333.49 |
| 11 | 2.9% Medicare on line 6 | $1,247.35 |
| 12 | Self-employment tax (to Schedule 2, line 4) | $6,580.84 |
| 13 | Deduction for one-half of self-employment tax (to Schedule 1, line 15) | $3,290.42 |
Notice that tips are still in the $46,575. Schedule SE is figured before any tips deduction, as the tips guide explains. If you also have W-2 wages, the Social Security wage base is shared, which lowers line 9 and can reduce line 10. The self-employment tax calculator handles that case.
Step 3: where the half-SE deduction lands
Schedule 1 line 15 (deductible part of self-employment tax) is an adjustment to income. It lowers adjusted gross income, not business profit, so it reduces income tax but not self-employment tax. For this driver, $46,575.00 − $3,290.42 gives an adjusted gross income of $43,284.58. The self-employed health insurance deduction (Schedule 1 line 17 on the 2026 draft) would also be an adjustment at this stage, though this driver has none.
Step 4: the standard deduction, tips, and QBI
- Standard deduction: $16,100 for a single filer in 2026.
- Tips deduction (Schedule 1-A): $7,000, within the net-profit and $25,000 limits.
- QBI deduction (Form 8995): Line 1 uses qualified business income, which is net profit reduced by the deductible half of self-employment tax (and by any self-employed health insurance and retirement plan contributions). Here that is $43,284.58, and 20% of it (line 5) is $8,656.92. Line 11, taxable income before the QBI deduction, is $20,184.58 (adjusted gross income less the standard deduction less the tips deduction). Line 14 is the income limitation, 20% of that: $4,036.92. Line 15 takes the smaller amount, so the QBI deduction is $4,036.92, and line 17 sends it to Form 1040 (line 13a on the 2025 form). Line 16 holds the $400 minimum deduction, which applies to active business income of at least $1,000 for tax years beginning after 2025; it does not matter here because the calculated amount is larger.
Taxable income is then $43,284.58 − $16,100 − $7,000 − $4,036.92 = $16,147.66. Income tax at 2026 rates is $1,689.72 (10% on the first $12,400, then 12%).
The result
| Item | Amount |
|---|---|
| Net profit (Schedule C line 31) | $46,575.00 |
| Self-employment tax (Schedule SE line 12) | $6,580.84 |
| Adjusted gross income | $43,284.58 |
| Taxable income | $16,147.66 |
| Income tax | $1,689.72 |
| Total federal tax | $8,270.56 |
That is about 13.3% of the $62,000 of receipts, which is the percentage the calculator would tell this driver to set aside from each payout. Self-employment tax is roughly four-fifths of the bill, which is why Schedule SE is worth understanding even though most of the attention goes to income tax. To turn the total into payments, follow the estimated tax payment guide. General information for tax year 2026, not tax advice; check line numbers against the final 2026 forms.
Frequently asked questions
Do I report tips on Schedule C?
Yes. Tips are part of your gross receipts on line 1, along with the rest of your gig income. The tips deduction is a separate, later step on Schedule 1-A and does not reduce the net profit that Schedule SE uses.
Where does Schedule SE tax go on my return?
Schedule SE line 12 is the self-employment tax. The instructions say to enter it on Schedule 2, line 4, which adds it to your total tax. The deduction for half of it is figured on Schedule SE line 13 and goes to Schedule 1, line 15.
What if my net profit is under $400?
Schedule SE line 4c says that if the amount is less than $400 you stop and do not owe self-employment tax. You still report the income on Schedule C, and the amount used is net profit times 92.35%.
Do I fill out Part IV of Schedule C?
Part IV asks for vehicle information when you claim car and truck expenses on line 9 and are not required to file Form 4562 for the business. It asks when you placed the vehicle in service for business and your business, commuting, and other miles, and whether you have written evidence.
Which form do I use for the QBI deduction?
Form 8995 is the simpler form and applies when your taxable income is at or below the threshold. Above the threshold you use Form 8995-A. The deduction goes to Form 1040 line 13a on the 2025 form.
Are these line numbers final for 2026?
Not entirely. Schedule C, Schedule SE, Schedule 1, and Schedule 1-A for 2026 are early release drafts at the time of writing. We checked the 2025 final forms and the 2026 drafts for each line named here and flag the differences, but recheck against the final forms in January.
Sources
- IRS, Schedule C (Form 1040), 2026 draft and 2025 final: lines 1, 9, 27b, 28, 31, Parts IV and V
- IRS, Schedule SE (Form 1040), 2026 draft and 2025 final: 92.35%, $400 test, $184,500 wage base, 12.4% and 2.9%, lines 12 and 13
- IRS, Schedule 1 (2026 draft): line 15 deductible part of self-employment tax, line 17 self-employed health insurance
- IRS, Form 8995 and its instructions (2025): QBI reduced by deductible half of SE tax; line 11 taxable income definition; 20% limits; and 26 U.S.C. § 199A(i) for the $400 minimum
- IRS, Instructions for Schedule C and Instructions for Schedule SE
- IRS, Schedule 1-A: tips deduction, taken after adjusted gross income
- IRS, Form 1040-ES (2026): 2026 standard deduction ($16,100 single) and tax rate schedules (10% to $12,400, 12% to $50,400 single); see also our methodology