The net income or loss for a business is figured on the Schedule C by calculating business income and subtracting business expenses, which may include the costs associated with maintaining a home offices as well as many other deductible business expenses. The total profit (or loss) is then entered on your 1040 as income.
I am not a tax attorney, CPA or tax preparation specialist. The information here is meant as a general guide. For specific questions about your own taxes, please refer to IRS publications or consult a tax specialist.