Schedule C tax form: where every expense goes, line by line (2026)

Schedule C is the form sole proprietors and single-member LLCs use to report business profit. Part I is your income: everything on your 1099-NEC and 1099-K forms, plus anything you were paid without one. Part II lists the expense lines. Sorting your spending into them is most of the work of bookkeeping, and doing it as you go saves a miserable March.

The expense lines

Line	Category	Typical examples
8	Advertising	Google and Meta ads, Pinterest ads, flyers, sponsored posts
9	Car and truck expenses	Business miles at the IRS rate, or actual costs × business share, plus parking and tolls
10	Commissions and fees	Etsy, Upwork and Fiverr fees, Stripe and PayPal processing fees
11	Contract labor	Freelancers and contractors you pay (not employees); pay one $2,000 or more and you send them a 1099-NEC
12	Depletion	Rare; natural resources
13	Depreciation and section 179	Computers, cameras and equipment (details on Form 4562)
14	Employee benefit programs	Benefits for employees, not for you
15	Insurance (other than health)	Business liability, professional and equipment insurance
16a / 16b	Interest	Mortgage interest on business property; interest on business loans and cards
17	Legal and professional services	Accountant, tax preparer, lawyer, LLC filing services
18	Office expense	Printer ink, paper, small office items
19	Pension and profit-sharing plans	Contributions for employees
20a / 20b	Rent or lease	Equipment or vehicle leases; a studio, desk or storage unit
21	Repairs and maintenance	Fixing business equipment
22	Supplies	Materials used up in your work (not inventory)
23	Taxes and licenses	Business licenses, state filing fees, the employer share of payroll tax
24a	Travel	Flights, hotels and transport for business trips away from home
24b	Deductible meals	Business meals, entered at 50%
25	Utilities	Business phone and internet (the business share)
26	Wages	Pay to employees
27a	Energy efficient commercial buildings	Rare; Form 7205
27b	Other expenses	Software and subscriptions, shipping and postage, bank fees, courses: anything you list in Part V

Line 30 is separate: it's the home office deduction, either the simplified $5 per square foot for up to 300 square feet, or the business share of your rent, utilities and insurance. It can't create a loss.

If you sell products: Part III

Etsy sellers, print-on-demand shops and resellers report what they paid for inventory and materials in Part III, cost of goods sold (lines 35 to 42), not as expenses in Part II. The total flows to line 4 and comes off your gross receipts. Printful orders, blank stock and packaging that ships with the product usually belong here.

What doesn't go on Schedule C

These are real deductions or payments, but they go elsewhere, and putting them on Schedule C overstates your business expenses:

• Self-employed health insurance premiums go on Schedule 1, as an adjustment to income.
• SEP IRA and Solo 401(k) contributions for yourself also go on Schedule 1.
• Estimated tax payments aren't an expense at all. You list them as payments on your Form 1040.
• Transfers between your own accounts, credit card payments and owner draws move money around; they aren't spending.
• Loan principal isn't deductible, only the interest.
• Personal spending, even on a business card.

Mixed-use items

A phone you use 60% for work is 60% deductible. The same goes for internet and a car under the actual-expense method. Pick a reasonable percentage you could explain, and use it consistently.

See it month by month

Need a profit and loss statement for a landlord or lender, or just want to see these lines month by month? Our free profit and loss template uses the same Schedule C lines. Type each month's totals and it prints a one-page statement for any range of months.

Make it automatic

The Paid & Filed workbook ships with 49 categories, each tied to its Schedule C line or to its place elsewhere on your return, and 221 rules that sort bank transactions into them. Meals are cut to 50% for you, transfers and card payments are excluded, and the totals land line by line on a Schedule C tab you can copy into your tax software.