Updated November 7, 2026. Quick answer: The early-release draft of the 2026 Schedule C (Form 1040) changes one line on the form face: interest now has three lines, 16a for mortgage interest, new 16b for vehicle loan interest and 16c for other interest, where the 2025 form had 16a and 16b only. The draft instructions list more changes: a business mileage rate of 72.5 cents a mile from January 1 to June 30, 2026 and 76 cents from July 1, a new limit on employer meals, a limit on gambling losses and a higher $2,560,000 section 179 maximum.
The one change on the form face: interest
| Line | 2025 form | 2026 draft |
|---|---|---|
| 16a | Mortgage (paid to banks, etc.) | Mortgage (paid to banks, etc.) |
| 16b | Other | Vehicle loan |
| 16c | No such line | Other |
The draft instructions explain the new lines: “New Line 16b, Vehicle loan interest. Use line 16b to report the business-use portion of your vehicle loan interest.” and “New Line 16c, Other interest. Use line 16c to report interest not claimed on line 16a or 16b.” For a vehicle used for both business and personal purposes the instructions say to “allocate the vehicle loan interest between its business use and personal use.” They add that “If you claim a deduction on Schedule 1-A (Form 1040) for vehicle loan interest, then you can’t claim a deduction for that same interest on Schedule C.”
Other changes the draft instructions list
The What’s New section of the draft instructions includes these items, quoted as printed:
- “The business standard mileage rate from January 1, 2026, to June 30, 2026, is 72.5 cents per mile. The business standard mileage rate from July 1, 2026, to December 31, 2026, is 76 cents per mile.”
- “no deduction is allowed for expenses paid or incurred after 2025 by an employer, including a sole proprietor, for meals provided to employees at an employer-operated facility or meals provided for the convenience of the employer.”
- “Beginning in 2026, your gambling losses are limited to the lesser of (i) 90% of your gambling losses or (ii) gambling winnings.”
- “For 2026, the maximum section 179 expense deduction is $2,560,000.”
- “The energy efficient commercial buildings deduction is available only for property for which construction began before July 1, 2026.”
- “For 2026, the information reporting threshold for certain payments reported on Forms 1099 increased from $600 to $2,000.”
What reads the same
The deductible meals line is still 24b with the same text, and the energy efficient commercial buildings deduction is still line 27a (the 2026 draft spells out the word buildings where the 2025 form abbreviated it). The dollar figures in the list above come from the draft instructions, not from printed lines on the form.
What this page cannot tell you
- The draft has not been through OMB approval; the IRS cover sheet says “Do not file draft forms.” Check the final form before you file.
- This page lists the changes that alter a line’s meaning or number. It does not list the reworded business address block in item E (the draft asks for number and street, apartment number, city, state and ZIP code in separate fields), the draft’s added form-filing watermark text, or other changes in punctuation and layout.
- Who qualifies for a given deduction is decided by the instructions and the law, not by this summary.
Edition
This page compares the IRS early-release draft of the 2026 Schedule C (Form 1040, created May 15, 2026) and its draft instructions with the 2025 Schedule C final, retrieved on November 7, 2026. The 2026 documents are early-release drafts. The IRS says of such drafts: “We incorporate all significant changes to forms posted with this coversheet.” A draft can still be replaced before the final form is released, so check the final form before you rely on a line number.
Common mistakes
- Reporting vehicle loan interest on line 16b of a 2025 return. The 2025 form has no vehicle loan line; line 16b there is other interest.
- Claiming the same vehicle loan interest on both Schedule C and Schedule 1-A. The draft instructions say it can’t be claimed on both.
- Using one mileage rate for the whole of 2026. The draft instructions give two rates, split at July 1.
Related: Schedule C (Form 1040), Schedule C lines 16a and 16b, and standard mileage rate 2026.
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Answer againSources
- IRS draft Schedule C (Form 1040) for tax year 2026 (early release draft, irs.gov/pub/irs-dft): irs.gov (PDF)
- IRS draft Instructions for Schedule C (Form 1040) for tax year 2026 (early release draft, irs.gov/pub/irs-dft): irs.gov (PDF)
- IRS Schedule C (Form 1040) for tax year 2025 (final, irs.gov/pub/irs-prior): irs.gov (PDF)
Read from the documents linked above on November 7, 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.