When Different Kinds of Work Belong on Schedule C: Small-Business Taxes (2025 IRS Guide)

This guide covers “When Different Kinds of Work Belong on Schedule C” within small-business taxes. The following material presents the IRS treatment of this topic, including the qualifications, exceptions, and examples in the source section. Read the rules alongside the facts of your own situation before deciding what to report, deduct, or document.

Adapted from Publication 334 (2025), Tax Guide for Small Business, published by the Internal Revenue Service. This guide retains the source edition’s years, amounts, deadlines, and examples. It is guidance for that edition, not a statement that the same figures apply to every tax year.

When Different Kinds of Work Belong on Schedule C

This section provides information to determine whether your earnings should be reported on Schedule C (Form 1040).

Direct seller.

You must report all income you receive as a direct seller on Schedule C (Form 1040). This includes any of the following.

• Income from sales—payments you receive from customers for products they buy from you.

• Commissions, bonuses, or percentages you receive for sales and the sales of others who work under you.

• Prizes, awards, and gifts you receive from your selling business.

You must report this income regardless of whether it is reported to you on an information return.

You are a direct seller if you meet all the following conditions.

1. You are engaged in one of the following trades or businesses.

   1. Selling or soliciting the sale of consumer products either in a home or other place that is not a permanent retail establishment, or to any buyer on a buy-sell basis or a deposit-commission basis for resale in a home or other place of business that is not a permanent retail establishment.

   2. Delivering or distributing newspapers or shopping news (including any services directly related to that trade or business).

2. Substantially all your pay (whether paid in cash or not) for services described above is directly related to sales or other output (including performance of services) rather than to the number of hours worked.

3. Your services are performed under a written contract between you and the person for whom you perform the services, and the contract provides that you will not be treated as an employee for federal tax purposes.

Executor or administrator.

If you administer a deceased person’s estate, your fees are reported on Schedule C (Form 1040) if you are one of the following.

1. A professional fiduciary.

2. A nonprofessional fiduciary (personal representative) and both of the following apply.

   1. The estate includes an active trade or business in which you actively participate.

   2. Your fees are related to the operation of that trade or business.

3. A nonprofessional fiduciary of a single estate that requires extensive managerial activities on your part for a long period of time, provided these activities are enough to be considered a trade or business.

If the fees do not meet the above requirements, report them on line 8z of Schedule 1 (Form 1040).

Fishing crew member.

If you are a member of a crew that catches fish or other aquatic life, your earnings are reported on Schedule C (Form 1040) if you meet all the requirements shown in chapter 10 under Fishing crew member.

Insurance agent, former.

Termination payments you receive as a former self-employed insurance agent from an insurance company because of services you performed for that company are not reported on Schedule C (Form 1040) if all the following conditions are met.

• You received payments after your agreement to perform services for the company ended.

• You did not perform any services for the company after your service agreement ended and before the end of the year in which you received the payment.

• You entered into a covenant not to compete against the company for at least a 1-year period beginning on the date your service agreement ended.

• The amount of the payments depended primarily on policies sold by you or credited to your account during the last year of your service agreement or the extent to which those policies remain in force for some period after your service agreement ended, or both.

• The amount of the payment did not depend to any extent on length of service or overall earnings from services performed for the company (regardless of whether eligibility for the payments depended on length of service).

Insurance agent, retired.

Income paid by an insurance company to a retired self-employed insurance agent based on a percentage of commissions received before retirement is reported on Schedule C (Form 1040). Also, renewal commissions and deferred commissions for sales made before retirement are generally reported on Schedule C (Form 1040).

However, renewal commissions paid to the survivor of an insurance agent are not reported on Schedule C (Form 1040).

Newspaper carrier or distributor.

You are a direct seller and your earnings are reported on Schedule C (Form 1040) if all the following conditions apply.

• You are in the business of delivering or distributing newspapers or shopping news (including directly related services such as soliciting customers and collecting receipts).

• Substantially all your pay for these services directly relates to your sales or other output rather than to the number of hours you work.

• You perform the services under a written contract that says you will not be treated as an employee for federal tax purposes.

This rule applies whether or not you hire others to help you make deliveries. It also applies whether you buy the papers from the publisher or are paid based on the number of papers you deliver.

Newspaper or magazine vendor.

If you are age 18 or older and you sell newspapers or magazines, your earnings are reported on Schedule C (Form 1040) if all the following conditions apply.

• You sell newspapers or magazines to ultimate consumers.

• You sell them at a fixed price.

• Your earnings are based on the difference between the sales price and your cost of goods sold.

This rule applies whether or not you are guaranteed a minimum amount of earnings. It also applies whether or not you receive credit for unsold newspapers or magazines you return to your supplier.

Notary public.

Fees you receive for services you perform as a notary public are reported on Schedule C (Form 1040). These payments are not subject to SE tax (see the Instructions for Schedule SE (Form 1040)).

Public official.

Public officials generally don’t report what they earn for serving in public office on Schedule C (Form 1040). This rule applies to payments received by an elected tax collector from state funds on the basis of a fixed percentage of the taxes collected. Public office includes any elective or appointive office of the United States or its territories, the District of Columbia, a state or its political subdivisions, or a wholly owned instrumentality of any of these.

Public officials of state or local governments report their fees from the public on Schedule C (Form 1040) if they are paid solely on a fee basis and if their services are eligible for, but not covered by, social security under a federal-state agreement.

Real estate agent or direct seller.

If you are a licensed real estate agent or a direct seller, your earnings are reported on Schedule C (Form 1040) if both the following apply.

• Substantially all your pay for services as a real estate agent or direct seller directly relates to your sales or other output rather than to the number of hours you work.

• You perform the services under a written contract that says you will not be treated as an employee for federal tax purposes.

Dealer in section 1256 contracts.

If you are a dealer in options or commodities, your gains and losses from dealing or trading in section 1256 contracts (regulated futures contracts, foreign currency contracts, nonequity options, dealer equity options, and dealer securities futures contracts) or property related to those contracts (such as stock used to hedge options) are reported on Schedule C (Form 1040). For more information, see sections 1256 and 1402(i).

Securities or commodities trader.

You are a trader in securities or commodities if you are engaged in the business of buying and selling securities or commodities for your own account. As a trader in securities or commodities (including if you made the section 475(f) mark-to-market election as a trader in securities or commodities), your gain or loss from the disposition of securities or commodities is not reported on Schedule C (Form 1040). For more information about traders in securities or commodities, see Pub. 550, Investment Income and Expenses, and Topic No. 429, Traders in Securities.

Using the guidance

Keep the documents that establish the dates, amounts, and circumstances described above. References to other chapters, forms, worksheets, or earlier and later sections refer to the linked IRS publication. Check the full publication and its updates before relying on a rule for a different tax year or a situation not addressed here.

Sources and further reading

• Publication 334 (2025), Tax Guide for Small Business: Business Income — Guidelines for Selected Occupations — Internal Revenue Service; 2025 edition.

The cited U.S. government text is in the public domain. Source accessed October 28, 2026. Fynoptic has organized this material for educational use and is independent of, and not endorsed by, the IRS.