Schedule C is included with your return to report income or loss from a business you operated or a profession you practiced as a sole proprietor or single-member LLCs. Smaller businesses may be able to use Schedule C-EZ, a more simplified form.
According to the IRS, a business is an activity engaged in with continuity and regularity for the primary purpose of earning income. Irregular business activities or hobbies that earn money do not count for Schedule C; report that income directly on your 1040.
Schedule C is also where you report wages and expenses as a statutory employee, income and deductions from certain joint ventures, and certain income shown on Forms 1099-K and 1099-MISC. Note that small businesses and statutory employees with businesses expenses under $5,000 can file Schedule C-EZ instead.
Schedule C reports both the income and deductible expenses, eventually arriving at a net profit or loss. This net profit or loss can then be used on Form 1020 to determine your income tax liability for any profit or reduction in tax for a loss. It is also entered on Schedule SE to determine any self-employment tax.