U.S. · Tax forms
Schedule C line 31, net profit or loss.
Line 29 minus line 30, and where the result goes.
Line 31 is the “Net profit or (loss)”: line 29 minus line 30. A profit goes on Schedule 1 (Form 1040), line 3 and on Schedule SE, line 2. A loss sends you to line 32 to check the at-risk box before it is deducted.
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Result
What feeds line 31 and where it goes (2025 instructions, current form)
| Item | Meaning | What the IRS says |
|---|---|---|
| Line 29 | Tentative profit or (loss) | Subtract line 28 from line 7 |
| Line 30 | Expenses for business use of your home | Attach Form 8829 unless using the simplified method; do not report these expenses elsewhere |
| Line 31 | Net profit or (loss) | Subtract line 30 from line 29 |
| If a profit | Individuals | Enter on both Schedule 1 (Form 1040), line 3, and Schedule SE, line 2 |
| If a profit | Estates and trusts | Enter on Form 1041, line 3 |
| If a loss | Line 32 | You must go to line 32 and check box 32a (all investment at risk) or 32b (some not at risk, attach Form 6198) |
| Statutory employee | Schedule SE | Net profit goes on Schedule 1, line 3, but do not report it on Schedule SE, line 2 |
Why a loss is not always line 29 minus line 30
If your expenses (including line 30) exceed gross income, the instructions say not to enter the loss on line 31 until you have applied the at-risk rules and the passive activity loss rules (see Line 32 and the Instructions for Form 8582). After those rules, the line 31 loss may be smaller than the subtraction gives. A loss on line 31 may also be an excess business loss, which is figured on Form 461.
Prior-year passive losses
If your gross income exceeds your expenses but you have prior-year unallowed passive activity losses, the instructions say not to enter the net profit until you have figured, on Form 8582, how much of those losses you can claim this year. Write “PAL” to the left of the entry space to show you included them.
Other places the number matters
The instructions say a net profit on line 31 is earned income that may qualify you for the earned income credit, and a notary public does not put the line 31 profit on Schedule SE, line 2 unless other self-employment income requires Schedule SE. One-half of self-employment tax is a deduction on Schedule 1, line 15, not a Schedule C expense.
Worked example
Priya has a tentative profit of $48,200 on line 29 and claims $1,500 on line 30 under the simplified method. Line 31 is $46,700. She enters it on Schedule 1, line 3 and on Schedule SE, line 2. Names and figures are made up.
More line pages in this set
Related lines: Schedule SE Line 13, Schedule SE Line 8a.
Sources
- Instructions for Schedule C (Form 1040) (2025): Line 31 and Line 32 instructions. Page last reviewed or updated April 30, 2026. Read November 2, 2026.
- Schedule C (Form 1040): The printed line 29 to 32 wording and arithmetic. Read November 2, 2026.
- Instructions for Schedule SE (Form 1040) (2025): Statutory employee and Schedule SE line 2 references. Page last reviewed or updated April 30, 2026. Read November 2, 2026.
Tax year 2025 instructions (page last reviewed or updated April 30, 2026). The line labels were read from the Schedule C (Form 1040) PDF the IRS had posted on the date read, which is marked 2026, while the instructions are the 2025 edition; line numbers can shift between years, so check them against the form for your tax year. Names and figures in worked examples are made up.
Frequently asked questions
What is Schedule C line 31?
The net profit or (loss) from the business: line 29 minus line 30.
Where does a profit on line 31 go?
The form says to enter it on both Schedule 1 (Form 1040), line 3, and Schedule SE, line 2. Estates and trusts enter it on Form 1041, line 3.
What if line 31 is a loss?
The form says you must go to line 32 and check the box that describes your investment: 32a if all investment is at risk, 32b if some is not at risk, which requires Form 6198.
Does the loss on line 31 always equal line 29 minus line 30?
No. The instructions say to apply the at-risk and passive activity loss rules first, so the line 31 loss may be smaller.
Is line 31 earned income?
The instructions say a net profit on line 31 is earned income and may qualify you for the earned income credit.
Not tax advice
This page summarizes IRS instructions, mostly written for the people who prepare the form, and is not tax, legal or financial advice. A CPA or an enrolled agent can confirm what a line means for your return. Everything runs in your browser; nothing you enter is sent anywhere.