Schedule C deductions list

The general rule

A business expense is deductible if it is ordinary and necessary for your trade: common in your field and helpful for the business. Personal costs are not deductible, and mixed-use costs (a phone, internet, a car) are deductible only for the business share.

Part II, line by line

• Line 8, advertising: ads, business cards, website promotion, Etsy Ads.
• Line 9, car and truck expenses: standard mileage or actual costs, plus business parking and tolls.
• Line 10, commissions and fees: platform and payment processing fees, agent commissions.
• Line 11, contract labor: freelancers and contractors you paid.
• Line 13, depreciation and section 179: equipment and other assets deducted over time or in the first year (Form 4562).
• Line 15, insurance (other than health): business liability, equipment coverage.
• Line 16, interest: on business loans and business credit card balances.
• Line 17, legal and professional services: accountant, tax preparer, lawyer.
• Line 18, office expense: postage, small office items, software subscriptions are often put here or under other expenses.
• Line 20, rent or lease: equipment rental, a studio or coworking desk.
• Line 21, repairs and maintenance: fixing equipment.
• Line 22, supplies: materials used up in the business that are not part of products sold.
• Line 23, taxes and licenses: business licenses, the employer share of payroll taxes, some state fees.
• Line 24a, travel: flights, lodging and transport on business trips away from home.
• Line 24b, meals: business meals, generally only 50% deductible, with a record of who and why.
• Line 25, utilities: for a business location (home utilities go through the home office rules).
• Line 26, wages: employees on payroll.
• Line 27a, other expenses: listed in Part V, such as software, education related to your current work, bank fees, professional dues.
• Line 30, business use of home: the home office deduction, simplified or Form 8829.

Two rules that save time

De minimis safe harbor: if you elect it, items costing $2,500 or less per item or per invoice can be expensed in the year you buy them instead of depreciated. A laptop under that amount can be a one-year deduction. Business gifts: deductible up to $25 per recipient per year.

Example with made-up numbers
Freelance designer, net receipts 58,000
Software 840 · laptop 1,900 (de minimis) · coworking 1,200 · accountant 450 · ads 300 · fees 1,160 · meals 600 × 50% = 300 · mileage and parking 830 · home office (simplified) 900
Total deductions: 7,880

Deductions that are not on Schedule C

Some self-employed deductions go on Schedule 1 of Form 1040 instead: half of self-employment tax, self-employed health insurance premiums and contributions to a SEP-IRA or solo 401(k). They lower your income tax but not your self-employment tax. Do not put them on Schedule C.

Commonly missed

• Payment platform fees taken before the payout.
• The business share of phone and internet.
• Parking and tolls on top of standard mileage.
• Small software subscriptions billed to a personal card.
• The home office, when the space really is used only for work.

Keep the receipts

For each expense: date, amount, who you paid and the business reason. A folder per month or a photo of each receipt saved with the date is enough. Without records, a deduction is hard to defend.

Line 30 is often the biggest single item; compare both methods in the free home office deduction calculator and read simplified vs regular method. For line 9, see the mileage log guide.

General information, not financial, tax or legal advice. Examples use made-up numbers.