Subtract your self-employment expenses from your self-employment income. If the difference is positive, meaning your self-employment income was greater than your expenses, the result is self-employment profit. If the difference is negative, meaning your self-employment expenses were greater than your income, the result is self-employment loss. You calculate your self-employment profit or loss on Form 1040 Schedule C [Profit or Loss from Business]. If you suffered a net loss, you can deduct this amount from your taxable income and do not have to complete Schedule SE [Self-Employment Tax].