Schedule C vs. Schedule E: Key Differences
Feature | Schedule C | Schedule E |
Purpose | Reports business income/loss from self-employment | Reports passive income from rentals, royalties, partnerships, etc. |
Who Uses It | Sole proprietors, freelancers, independent contractors | Landlords, passive investors, S-corp or partnership members |
Type of Income | Active (earned) income | Passive or portfolio income |
Subject to SE Tax? | Yes — subject to self-employment tax (15.3%) | No — typically not subject to SE tax |
Typical Deductions | Business expenses: supplies, mileage, home office | Rental expenses: mortgage interest, repairs, depreciation |
Form Used | Schedule C (Profit or Loss From Business) | Schedule E (Supplemental Income and Loss) |
Examples | Freelancer, consultant, Uber driver | Rental property owner, real estate investor |
What is an K-1?
A Schedule K-1 is a tax form used to report each partner’s share of income from a partnership.
This information is designed to support informed conversations with your chosen tax professional and business attorney. This content is for educational purposes only and does not constitute legal or tax advice.