Yes, self-employed people get the standard deduction. Filing a Schedule C does not lock you into itemizing, and taking business write-offs does not use up your standard deduction. The two live on different layers of the return: business expenses reduce your business profit, and then the standard deduction reduces your income after that. You choose between the standard deduction and itemizing the same way any W-2 employee does.
The confusion is understandable. Freelancers and sole proprietors hear “deductions” all day and assume there is one big pool to pick from. There isn’t. Schedule C deductions and the Schedule A itemized deductions are separate systems, and the standard deduction is the alternative to Schedule A, not to Schedule C.
How the Two Layers Actually Stack
Your return works as a sequence, and the order matters.
First, business expenses. You report your gross revenue on Schedule C and subtract your ordinary and necessary business costs. What’s left is your net profit, which appears on line 31 and flows to Schedule 1 of Form 1040 as part of your total income.1Internal Revenue Service. Instructions for Schedule C (Form 1040) (2025)
Second, above-the-line adjustments. On Schedule 1 you subtract things like the deductible half of your self-employment tax, self-employed health insurance premiums, and contributions to a self-employed retirement plan. Those adjustments reduce your income before AGI is calculated.2Internal Revenue Service. 2025 Schedule 1 (Form 1040) – Additional Income and Adjustments to Income
Third, and only now, the standard-versus-itemize decision. After AGI is set, you either take the flat standard deduction for your filing status or itemize on Schedule A. Whichever is larger is the one you use. Nothing about your Schedule C activity changes that choice or takes it away.
The practical effect: a freelancer earning $100,000 gross might deduct $25,000 in Schedule C business expenses, subtract above-the-line adjustments on top of that, and still take the full standard deduction against what remains. A W-2 employee earning the same $100,000 gets the standard deduction and generally not much else.
2026 Standard Deduction Amounts
The standard deduction is a flat dollar figure tied to your filing status. For the 2026 tax year:3Internal Revenue Service. IRS Releases Tax Inflation Adjustments for Tax Year 2026
- Single: $16,100
- Married filing jointly: $32,200
- Head of household: $24,150
- Married filing separately: $16,100
Taxpayers age 65 or older get an additional standard deduction on top of these base amounts. For 2025 through 2028, a new enhanced deduction adds $6,000 per qualifying individual, or $12,000 for a married couple where both spouses are 65 or older.4Internal Revenue Service. Check Your Eligibility for the New Enhanced Deduction for Seniors
When Itemizing Would Beat the Standard Deduction
Itemizing only helps if your Schedule A total exceeds your standard deduction. Itemized deductions include state and local taxes, mortgage interest, and medical expenses above 7.5% of AGI. The state and local tax deduction is capped at $40,000 for most filers, or $20,000 for married filing separately.5Internal Revenue Service. Topic No. 503, Deductible Taxes
For most self-employed filers, especially single ones, the standard deduction wins outright. Itemizing tends to pay off only if you have a sizable mortgage, live in a high-tax state, or have unusually large medical bills. Either way, your Schedule C business deductions are untouched by this choice. You claim them either way.
What Self-Employment Unlocks Along the Way
Answering the headline question is only half of it. Because business income flows through Schedule C, several other deductions become available that a W-2 employee cannot use, and none of them require you to itemize.
Above-the-Line Adjustments
Self-employment tax runs 15.3% of net earnings, covering both the employee and employer sides of Social Security and Medicare. You get to deduct the employer-equivalent half as an adjustment to income.6Internal Revenue Service. Self-Employment Tax (Social Security and Medicare Taxes)
You can also deduct 100% of premiums paid for medical, dental, vision, and qualifying long-term care insurance for yourself, your spouse, and your dependents. Because this deduction is on Schedule 1 rather than Schedule A, it lowers AGI directly and does not require itemizing. One catch worth knowing: you cannot claim it for any month you were eligible to participate in a subsidized health plan through your own employer, your spouse’s employer, or the employer of a dependent. Eligibility alone disqualifies you, whether or not you enrolled. The deduction is also capped at your net self-employment income for the year.7Internal Revenue Service. Instructions for Form 7206 (2025)
Contributions to a self-employed retirement plan are also deducted on Schedule 1. For 2026, a SEP IRA allows up to 25% of net self-employment earnings, capped at $72,000.8Internal Revenue Service. SEP Contribution Limits (Including Grandfathered SARSEPs) A Solo 401(k) allows up to $24,500 in employee deferrals plus employer contributions of up to 25% of net earnings, with a combined ceiling of $72,000.9Internal Revenue Service. Notice 2025-67 – 2026 Amounts Relating to Retirement Plans and IRAs A SIMPLE IRA allows up to $17,000 in employee deferrals for most plans. Every dollar contributed reduces taxable income before you ever get to the standard deduction step.
The Qualified Business Income Deduction
On top of all this, most self-employed filers can take a deduction equal to 20% of qualified business income under Section 199A. It sits on Form 1040 after AGI is calculated, and it stacks with the standard deduction. Originally set to expire after 2025, the deduction was extended by the One, Big, Beautiful Bill Act.10Internal Revenue Service. Qualified Business Income Deduction
If your Schedule C shows $80,000 in net profit after business expenses and adjustments, the QBI deduction could knock roughly another $16,000 off taxable income, and you still take the standard deduction on top. The calculation stays straightforward for sole proprietors with taxable income below $201,750 (or $403,500 filing jointly). Above those thresholds, the math grows more involved, and certain service-based fields such as law, accounting, and consulting face phase-in restrictions that can ultimately eliminate the deduction. The QBI deduction cannot exceed 20% of your taxable income minus net capital gains and cannot create or increase a net loss.
What You Cannot Deduct on Schedule C
A few common expenses look business-related but never qualify. Government fines and penalties are off-limits, including parking tickets picked up while meeting a client and late-filing penalties from state agencies. Political contributions and lobbying expenses are also excluded. Personal costs that overlap with business use, like a personal cell phone occasionally used for work calls, have to be split so only the genuine business portion is deducted.11Internal Revenue Service. Publication 334 (2025), Tax Guide for Small Business
Records That Back Up Both Sets of Deductions
Claiming business deductions and the standard deduction in the same year is routine, but the business side is where documentation matters. Every Schedule C expense should have records showing the amount, date, location, and business purpose. For travel, entertainment, and gift expenses, receipts are required for any single expense of $25 or more.12eCFR. 26 CFR 1.274-5A – Substantiation Requirements
Mileage deductions in particular need a contemporaneous log with the date, destination, business purpose, and miles driven. Reconstructing one after the fact rarely holds up on audit, and vehicle deductions are among the most commonly challenged. Keep business tax records for at least three years from the date you file, and longer if you’re depreciating equipment or property. The standard deduction itself needs no supporting paperwork; it’s a flat number tied to your filing status, and that’s the point.