Updated October 18, 2026. Quick answer: Line 6 is business income that is not reported anywhere else in Part I, such as scrap sales, finance reserve income or certain fuel tax refunds. Line 7 adds line 5 (gross profit) and line 6 to get gross income. Line 7 is then the starting point for the expense part of the schedule.
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What lines 6 and 7 ask for
The form describes line 6 as “Other income, including federal and state gasoline or fuel tax credit or refund (see instructions)” and line 7 as “Gross income. Add lines 5 and 6”. The instructions give the test for line 6 in one sentence: “Report on line 6 business income not reported elsewhere in Part I.” “Be sure to include amounts from the following.” Line 7 has no instruction paragraph of its own, so the form caption is the entire rule: it is the sum of line 5 and line 6. Line 5 is explained on the Schedule C lines 2 to 5 page.
What the instructions list for line 6
The instructions name these items. Each is quoted from the list: “Finance reserve income.” “Scrap sales.” “Interest (such as on notes and accounts receivable).” “State gasoline or fuel tax refunds you received in 2025.” “Prizes and awards related to your trade or business.” “Amounts you received in your trade or business as shown on Form 1099-PATR.” and “Other kinds of miscellaneous business income.”
The list also includes certain fuel credits, among them “Credit for federal tax paid on fuels claimed on your 2024 Form 1040 or 1040-SR.” It is a list of examples, and the closing item is a catch-all. Anything that is business income but that does not belong on line 1 is a candidate for line 6.
Accounting changes and listed property recapture
Two special cases land on line 6. The first comes from a change in accounting method: “Include any net positive section 481(a) adjustments on line 6.” The second involves listed property. The instructions say: “If the business use percentage of any listed property (defined under Line 13, later) dropped to 50% or less in 2025, report on this line any recapture of excess depreciation, including any section 179 expense deduction.” “Use Part IV of Form 4797 to figure the recapture.” Listed property is defined on the Schedule C lines 12 and 13 page, and the general idea of recapture is covered on the depreciation recapture page.
Where the number on line 7 comes from
Here is a labelled illustration, computed from the form’s own arithmetic, not an IRS example. Suppose line 5 were $45,000 and line 6 were $2,000. Line 7 adds the two, so gross income would be computed as $47,000. If line 6 were blank, line 7 would equal line 5.
Where it goes next
Line 7 is the figure expenses are subtracted from. Line 29 reads “Tentative profit or (loss). Subtract line 28 from line 7”, and line 28 is “Total expenses before expenses for business use of home. Add lines 8 through 27b”. The expense lines begin on the Schedule C lines 8 and 9 page, and line 29 is covered on the Schedule C lines 27a to 29 page.
This line is one step in a chain that ends at line 31. For a profit, the schedule says “If a profit, enter on both Schedule 1 (Form 1040), line 3, and on Schedule SE, line 2.” Schedule SE is the form that figures self-employment tax; it is introduced on the Schedule SE (Form 1040) page. The last step is covered on the Schedule C lines 31 and 32 page, and the return the schedule attaches to is explained on the Form 1040 page.
Edition and line numbers
This page reads the 2025 Schedule C (Form 1040) and its 2025 instructions, the current files irs.gov served on 2026-10-18 (byte-identical to the archived copies). They are the files for the tax year 2025 return, filed in 2026. The schedule says “Attach to Form 1040, 1040-SR, 1040-SS, 1040-NR, or 1041”. Check the tax year printed on the schedule you are filling in and use the line numbers on that year’s schedule, because a different year’s schedule can number or word its lines differently.
Common mistakes
- Leaving out smaller business income that is not on a Form 1099. The instructions say to “Report on line 6 business income not reported elsewhere in Part I.”
- Forgetting recapture when a listed property drops in business use. The instructions say to “report on this line any recapture of excess depreciation, including any section 179 expense deduction.”
- Putting a state fuel tax refund somewhere else. The list includes “State gasoline or fuel tax refunds you received in 2025.”
Related: Schedule C (Form 1040), depreciation recapture, Form 4562, and self-employment tax.
Sources
- Instructions for Schedule C (Form 1040), Profit or Loss From Business (2025): https://www.irs.gov/pub/irs-pdf/i1040sc.pdf
- Schedule C (Form 1040), Profit or Loss From Business (2025): https://www.irs.gov/pub/irs-pdf/f1040sc.pdf
Read from the IRS documents linked above on October 18, 2026. General information, not tax advice. Your own facts decide the outcome, and a preparer, the account provider or the IRS is the right place to confirm anything consequential.