If you are self-employed, or you have your own LLC, your income and expenses are reported as a sole proprietor on Schedule C.

Single-Member Limited Liability Company (LLC)

If you have your own LLC and you are the only member, normally the LLC is treated as transparent for tax purposes and you report the LLC's income and expenses on Schedule C.

There is an exception - if you make an election on form 8832 to treat the LLC as a corporation then the income and expenses will be taxed on a corporate tax return.

Cash or Accrual Method

If you are self-employed, you can use the cash or accrual method for your income and expenses.

Cash method - you report all income and expenses actually received during the year.

Accrual method - you report all income earned in the year and expenses incurred. You would use the earliest date from: (i) payment, (ii) amount due, (iii) earned and (iv) when title passes.

Income

Gross income includes all receipts from your trade, these would include income reported on 1099-MISC, any cash receipts, bank transfers and goods/services received in exchange.

Expenses You Can't Deduct

You can't deduct federal and state taxes - half your self-employed tax is deducted on the main federal return (1040).
Also, estate and gift taxes can not be deducted.

Business Use of Home

You may claim some expenses for business use of home - see our guide for claiming these expenses on form 8829.

When to File

While you are living outside the United States as an expat, the filing deadline for the US tax return is June 15 each year (extended to July 15 for 2020).
Schedule C is filed with your main federal tax return with the IRS.

Next Steps

If you do need to file Schedule C, or you have any questions about being self-employed in the US, outside the US, or have a mix across countries, feel free to contact one of our U.S. expat accountants and tax preparers here.