To calculate your net profit, you would total up all your gross receipts for the year and put them in line 1. Your costs of goods sold would be calculated on Part III and then added to line 3. Any income that is not considered standard revenue for your business goes on line 6. You then would categorize all of your expenses and put them in whichever line item they go to. Any expenses that do not fall under the listed categories would go on line 27a.

For sole proprietors, the net profit calculation is made on the bottom of the front page of your Schedule C or on Line 3 of your C-EZ. If you have more than one Schedule C, the results from each one are computed separately. To determine the net profit or loss of your business, you will need to deduct total expenses, reported on line 28 of Schedule C from total income reported on line 7.