Last updated September 28, 2026. This article is general information, not tax advice. For advice about your situation, talk with a tax professional.
Quick answer
Schedule C expense categories are the expense lines in Part II of IRS Schedule C, lines 8 through 27b, plus line 30 for business use of your home. They include Advertising, Car and truck expenses, Contract labor, Insurance, Legal and professional services, Office expense, Supplies, Taxes and licenses, Travel, Deductible meals, Utilities, and Other expenses. Sole proprietors and single-member business owners sort their business spending into these lines to report their profit or loss.
Key takeaways
- Schedule C is the form you use "to report income or (loss) from a business you operated or a profession you practiced as a sole proprietor," according to the IRS.
- Part II lists the expense categories. Most small businesses use only eight to twelve of them.
- Anything that doesn't fit a named line goes in Part V, Other expenses, with a description.
- Some costs look like business expenses but don't belong on Schedule C at all, such as federal income tax and your own health insurance.
- If you sort your expenses into these categories all year, tax time becomes copying totals instead of digging through statements.
Who uses Schedule C?
The IRS instructions open with this: "Use Schedule C (Form 1040) to report income or (loss) from a business you operated or a profession you practiced as a sole proprietor."
That includes freelancers, independent contractors, gig workers, consultants, tradespeople, and online sellers who run their business in their own name. If you get 1099 forms for your work, you're probably filing Schedule C. For help pulling those forms together, read our 1099 freelance tax organization guide.
The complete Schedule C expense categories list
Here are the Part II expense lines as they're printed on the 2025 Schedule C.
| Line | Category as printed on the form |
|---|---|
| 8 | Advertising |
| 9 | Car and truck expenses |
| 10 | Commissions and fees |
| 11 | Contract labor |
| 12 | Depletion |
| 13 | Depreciation and section 179 expense deduction |
| 14 | Employee benefit programs (other than on line 19) |
| 15 | Insurance (other than health) |
| 16a | Interest: Mortgage (paid to banks, etc.) |
| 16b | Interest: Other |
| 17 | Legal and professional services |
| 18 | Office expense |
| 19 | Pension and profit-sharing plans |
| 20a | Rent or lease: Vehicles, machinery, and equipment |
| 20b | Rent or lease: Other business property |
| 21 | Repairs and maintenance |
| 22 | Supplies (not included in Part III) |
| 23 | Taxes and licenses |
| 24a | Travel |
| 24b | Deductible meals |
| 25 | Utilities |
| 26 | Wages (less employment credits) |
| 27a | Energy efficient commercial bldgs deduction |
| 27b | Other expenses (from line 48) |
| 30 | Expenses for business use of your home |
Each Schedule C expense category explained
Line 8: Advertising
Money you spend to promote your business. Common examples include social media ads, business cards, flyers, website ads, sponsored posts, and signs.
Line 9: Car and truck expenses
The cost of using a car or truck for business. The IRS instructions say, "You can deduct the actual expenses of operating your car or truck or take the standard mileage rate." Actual expenses include gas, oil changes, repairs, insurance, and registration, multiplied by the share of miles you drove for business. The standard mileage rate is a set amount per business mile that the IRS announces each year.
Either way, you need a mileage log. Write down the date, where you went, why, and how many miles you drove. Driving from home to a regular workplace usually counts as commuting, not business driving.
Line 10: Commissions and fees
Commissions and fees you pay to others to run your business. Examples include sales commissions, platform selling fees, and referral fees.
Line 11: Contract labor
The IRS instructions say, "Contract labor includes payments to persons you do not treat as employees (for example, independent contractors) for services performed for your trade or business." If you hire a freelance editor, a subcontractor, or a virtual assistant who isn't on payroll, their pay goes here. You may need to send them a 1099-NEC, so check the current IRS filing threshold.
Line 12: Depletion
A deduction for using up natural resources such as timber, oil, gas, or minerals. Most small service businesses never use this line.
Line 13: Depreciation and section 179 expense deduction
Equipment and other property that lasts more than a year, such as a computer, a camera, or tools, usually isn't deducted all at once as a supply. Instead you depreciate it over time or elect to deduct it under section 179. This line has its own rules and forms, so it's a good one to review with a tax professional.
Line 14: Employee benefit programs
Benefits you pay for your employees, such as health or life insurance plans. The IRS instructions say, "Do not include on line 14 any contributions you made on your behalf as a self-employed person to an accident and health plan."
Line 15: Insurance (other than health)
Business insurance premiums, such as general liability, professional liability, business property, and commercial auto coverage. Your own health insurance doesn't go here. The instructions say you "may be able to deduct on Schedule 1 (Form 1040), line 17, the amount you paid for health insurance on behalf of yourself, your spouse, and dependents."
Line 16: Interest
Interest on business debt. Line 16a is for mortgage interest paid to banks on business property. Line 16b is for other business interest, such as interest on a business credit card or a business loan. Interest on personal debt doesn't belong here.
Line 17: Legal and professional services
Fees you pay to attorneys, accountants, bookkeepers, and tax preparers for business work. For example, the part of your tax preparation fee that covers your business return.
Line 18: Office expense
The IRS instructions say, "Include on this line your expenses for office supplies and postage." Examples include printer paper, ink, pens, folders, envelopes, and stamps.
Line 19: Pension and profit-sharing plans
Contributions to retirement plans for your employees. Contributions for yourself as a sole proprietor usually go on Schedule 1, not here.
Line 20: Rent or lease
Line 20a covers renting vehicles, machinery, and equipment, such as a rented lift or a leased work van. Line 20b covers other business property, such as office space, a studio, a booth, or a storage unit you use for the business.
Line 21: Repairs and maintenance
The cost of fixing and maintaining business property to keep it in working order, such as repairing a work laptop or servicing equipment. Improvements that add value or extend the life of property are usually depreciated instead.
Line 22: Supplies
Materials you use up in the business that aren't part of the products you sell. The IRS instructions say, "In most cases, you can deduct the cost of materials and supplies only to the extent you actually consumed and used them in your business during the tax year." For a cleaning business, that's cleaning products. For a photographer, it might be backdrops and props.
Line 23: Taxes and licenses
Business taxes and fees, such as business licenses, permits, and the employer's share of payroll taxes. The instructions list items you can't deduct here, starting with "Federal income taxes, including your self-employment tax." Your quarterly estimated tax payments aren't a business expense.
Line 24a: Travel
Travel expenses for business trips away from your tax home, such as airfare, lodging, and rental cars. You need records showing the time, place, and business purpose of each trip.
Line 24b: Deductible meals
Business meals. The instructions say, "In most cases, you can deduct only 50% of your business meal expenses, including meals incurred while away from home on business." Enter only the deductible part on this line.
Line 25: Utilities
Utilities for your business location, such as electricity, water, gas, and business phone service. If you work from home, household utilities usually belong with your home office deduction on line 30 instead. Many people also put their business share of internet and cell phone service here.
Line 26: Wages
Pay for employees on your payroll, minus any employment credits. Pay to independent contractors goes on line 11, and money you pay yourself as a sole proprietor isn't a wage.
Line 27a: Energy efficient commercial buildings deduction
A special deduction for making a commercial building more energy efficient. The instructions describe it this way: "You may be able to deduct part or all of the expenses of modifying an existing commercial building to make it energy efficient." Most freelancers never use it.
Line 27b: Other expenses
The form describes Part V as "business expenses not included on lines 8–27a, or line 30." You list each item with a description, and the total from line 48 goes on line 27b. Software subscriptions, bank fees, professional dues, education related to your current business, and website hosting often land here.
Line 30: Expenses for business use of your home
The home office deduction. You can use the regular method or the simplified method. The IRS describes the simplified option as a "Standard deduction of $5 per square foot of home used for business (maximum 300 square feet)." Either way, the space has to be "exclusively used on a regular basis for business purposes."
What doesn't go on Schedule C?
These costs often end up in a business expense log by mistake:
- Federal income tax and self-employment tax. The instructions list these as taxes you can't deduct on line 23.
- Your own health insurance. It may be deductible, but on Schedule 1, not Schedule C.
- Money you pay yourself. Transfers from your business account to your personal account are owner's draws, not expenses.
- Personal spending. Groceries, personal clothing, and family trips don't become business expenses because you paid with the business card. Read how to separate business and personal expenses.
- Loan principal. Paying down the balance of a loan isn't an expense. Only the interest goes on line 16.
How to sort your expenses into Schedule C categories all year
- Pick your categories once. Go through the list above and keep only the lines your business uses.
- Write down your rules. For each category, list the vendors and purchases that belong there. For example, "Adobe, Google Workspace, web hosting: Other expenses."
- Use a dropdown. In a spreadsheet, a dropdown list stops you from typing the same category two different ways. Our self-employed expense tracker guide shows you how to set one up.
- Categorize every week or month. Don't let uncategorized expenses pile up until April.
- Keep your proof. Save receipts, invoices, and statements. Read what receipts you need to keep for taxes.
The Bookkeeping Rescue Kit already has Schedule C categories built in. Its Category Reference tab explains every category in plain English, with examples and its Schedule C line, and the Transaction Tracker uses dropdowns so each expense lands in the right place. One-time purchase, yours forever.
Get the Kit →Frequently Asked Questions
They're the expense lines in Part II of Schedule C: Advertising, Car and truck expenses, Commissions and fees, Contract labor, Depletion, Depreciation, Employee benefit programs, Insurance, Interest, Legal and professional services, Office expense, Pension and profit-sharing plans, Rent or lease, Repairs and maintenance, Supplies, Taxes and licenses, Travel, Deductible meals, Utilities, Wages, the energy efficient commercial buildings deduction, and Other expenses. Line 30 covers business use of your home.
The IRS instructions say office expense is for "office supplies and postage," such as paper, ink, and stamps. Supplies, on line 22, are materials you use up in your business, such as cleaning products for a cleaning business.
Schedule C has no software line. Many filers list software subscriptions in Part V, Other expenses, with a description, and the total carries to line 27b. Ask your tax preparer which line fits your business.
No. The IRS instructions say you may be able to deduct health insurance for yourself, your spouse, and your dependents on Schedule 1 (Form 1040), line 17, instead.
No. Use only the lines that apply to your business. Most small businesses use a handful.
List it in Part V, Other expenses, with a short description. The total goes on line 27b.