Is the definition of "self-employed income", the total revenue minus costs?

[MinhT1 · Accepted solution]

Yes, your self-employed income is equal to your self-employed revenues minus the deductible expenses.

[KB511]

Thank you for responding yes. On the Turbo Tax format, it also asks for Subcontractor labor. Do you add that number in again?

[AmyC · Accepted solution]

Let's back up to income. When you are filling out the schedule C, at the top, it asks for income. In that location, it means total of all revenue from every source. When you are talking to a bank about income - it is Minh's answer above. So sorry for the confusion!

You want all income at the top and then list expenses, subcontractors, supplies, etc down under the actual category for each expense. The IRS uses those categories, with your income and location to determine  your audit risk. Let me help with some links for business owners:

Small Business and Self-Employed Tax Center - complete guide

•  About Schedule C (Form 1040), Profit or Loss from Business ...    
• Publication 535, Business Expenses
• Publication 583, Starting a Business and Keeping Records
• Self-Employment Taxes
• Form 1040-ES, Estimated Tax for Individuals
• Deducting Expenses
• Recordkeeping
• Hobby or a Business. 

[KB511]

So, if I am reading this right, total income is gross revenue, not net revenue. I build swimming pools, so I have gross revenue, equipment purchases and subcontractor labor that gets deducted to realize net revenue (income). Right? 

[DMarkM1]

That is correct.  You will enter gross income first and then expenses after that to get the net.