# Schedule C expense categories

> The expense categories on IRS Schedule C, Part II (lines 8 to 27a), in the form's order, with a plain-language note for each. Every new Expense account starts with these categories pre-filled, so receipts land in the same buckets your tax return uses; rename or add your own in settings anytime.

When you file as a sole proprietor or single-member LLC, business profit and expenses are reported on Schedule C of Form 1040, and Part II of that form is where the expense categories live. These are the 23 lines.

| Line | Category | What goes there |
| --- | --- | --- |
| 8 | Advertising | Ads and promotion: mailers, web ads, print, business cards. |
| 9 | Car and truck expenses | Driving for the business, via the standard mileage rate or actual vehicle costs. Commutes don't count. |
| 10 | Commissions and fees | Sales commissions and platform or service fees. |
| 11 | Contract labor | Payments to contractors and freelancers (1099 work), not employees. |
| 12 | Depletion | Costs of extracting natural resources. Most service businesses never touch this line. |
| 13 | Depreciation and section 179 expense deduction | Recovering the cost of equipment and property over time, or all at once under section 179. |
| 14 | Employee benefit programs | Benefits for employees: health and life plans, dependent care. As a sole proprietor you generally can't count your own. |
| 15 | Insurance (other than health) | Business insurance: liability, malpractice, workers' comp. Health insurance for the self-employed goes on Schedule 1 instead. |
| 16a | Mortgage interest paid to banks, etc. | Interest on a mortgage for business property. |
| 16b | Other interest | Other business borrowing: credit lines, business cards, equipment loans. |
| 17 | Legal and professional services | Lawyers, accountants, consultants, and similar professional fees. |
| 18 | Office expenses | Small consumables: pens, paper, toner. Furniture and equipment belong on the depreciation line. |
| 19 | Pension and profit-sharing plans | Contributions to retirement plans: SEP, SIMPLE, 401(k). |
| 20a | Rent or lease: vehicles, machinery, and equipment | Renting vehicles and equipment for the business. |
| 20b | Rent or lease: other business property | Rent for an office, storefront, or workspace. |
| 21 | Repairs and maintenance | Fixing and maintaining business property and equipment. Improvements that extend its life depreciate instead. |
| 22 | Supplies | Materials the business consumes: stock, raw materials, shipping supplies. |
| 23 | Taxes and licenses | Payroll tax, sales tax, licenses, permits. Federal income tax is never deductible. |
| 24a | Travel | Business trips: airfare, hotels, and transport while away overnight. |
| 24b | Meals and entertainment | Business meals are 50% deductible; entertainment stopped being deductible in 2018. Expense splits the receipt for you. |
| 25 | Utilities | Phone, internet, and power for the business; often a partial percentage for a home office. |
| 26 | Wages | Salaries and wages paid to employees. Not you, and not contractors (line 11). |
| 27a | Other expenses | Anything that fits no line above, itemized in Part V of the form. |

Source: [About Schedule C (Form 1040)](https://www.irs.gov/forms-pubs/about-schedule-c-form-1040). Car and truck expenses can also use the standard mileage rate: see [IRS standard mileage rates by year](https://expense.labnotes.org/mileage-rates). [Expense](https://expense.labnotes.org/) seeds every new account with this exact list, in this order, so yearly totals line up with the return without re-bucketing.