You can do either.
Your Schedule C income goes on the first page of your 1040. It's combined with all income, even from your non-business activities.
Your standard deduction is what the government gives you for your filing status. Your itemized deductions are what you pay in medical bills, home mortgage interest, taxes, etc. You take the HIGHER of the two numbers and subtract that from your adjusted gross income (AGI) to arrive at your taxable income.
The bottom line? You can take either type of deduction, whichever is higher.
