Updated October 2026 · 6 minute read
Schedule C is where sole proprietors and single-member LLCs report business income and expenses. The hard part is not the form, it is putting a year of receipts into the right lines. This guide lists every Schedule C expense category with plain-English examples, and shows how to set up a spreadsheet that totals them for you.
- Part II, lines 8–27b are the expense categories, from advertising to other expenses.1
- Home office goes on line 30, not in Part II.1
- Anything that fits no line goes on line 27b, itemized in Part V.1
- Business mileage 2026: 72.5¢ a mile Jan–Jun, 76¢ from July 1.23
- Not deductible here: your own pay, income taxes, entertainment.1
Every Schedule C expense line
| Line | Category | Common examples for a small service business |
|---|---|---|
| 8 | Advertising | Website, online ads, flyers, business cards, sponsorships |
| 9 | Car and truck expenses | Business miles at the standard mileage rate, or actual vehicle costs, plus business parking and tolls |
| 10 | Commissions and fees | Platform and booking fees, sales commissions you pay |
| 11 | Contract labor | Payments to independent contractors (not employees) |
| 12 | Depletion | Natural resources such as timber; rare for service businesses |
| 13 | Depreciation and section 179 | Equipment, tools, computers and vehicles you write off over time or expense under section 179 (Form 4562) |
| 14 | Employee benefit programs | Health, group-term life and dependent care plans for employees |
| 15 | Insurance (other than health) | Business liability, commercial auto, equipment and bonding premiums |
| 16a | Interest: mortgage | Mortgage interest on business property reported on Form 1098 |
| 16b | Interest: other | Interest on business loans and credit cards used for the business |
| 17 | Legal and professional services | Accountant, bookkeeper and attorney fees for the business |
| 18 | Office expense | Office supplies and postage |
| 19 | Pension and profit-sharing plans | Employer contributions to employee retirement plans |
| 20a | Rent or lease: vehicles, machinery, equipment | Leased equipment or vehicles, business portion |
| 20b | Rent or lease: other business property | Office, shop, storage unit or commissary rent |
| 21 | Repairs and maintenance | Routine repairs that keep equipment working (improvements are capitalized instead) |
| 22 | Supplies | Materials and supplies used up during the year, such as cleaning chemicals or shop supplies |
| 23 | Taxes and licenses | Business licenses, permits, payroll taxes you pay as employer (not income tax) |
| 24a | Travel | Lodging and transportation for overnight business trips |
| 24b | Deductible meals | Business meals, generally 50% deductible; no entertainment |
| 25 | Utilities | Phone, internet and power used for the business |
| 26 | Wages | Employee pay, not amounts you pay yourself |
| 27a | Energy efficient commercial buildings deduction | From Form 7205; rare for small service businesses |
| 27b | Other expenses | Anything not listed above, itemized in Part V: software subscriptions, bank fees, uniforms, education |
| 30 | Business use of your home | Form 8829, or the simplified method at $5 per sq ft up to 300 sq ft |
Line numbers and names follow the IRS 2025 Instructions for Schedule C.1 The examples are ours, written for service businesses; check unusual items with a tax professional.
Lines that trip people up
- Car and truck (line 9). Pick the standard mileage rate or actual costs. Either way you need a mileage log showing business miles.1
- Supplies vs office expense (lines 22 and 18). Office supplies and postage go on 18; materials used to do the work, like cleaning chemicals or shop supplies, go on 22.
- Repairs vs depreciation (lines 21 and 13). A repair keeps something working. Replacing or upgrading it so it lasts longer or is worth more is capitalized and depreciated instead.1
- Contract labor vs wages (lines 11 and 26). Contractors go on 11, employees on 26. Never put your own draws on either.
- Meals (line 24b). Business meals are generally 50% deductible, and entertainment is not deductible at all.1
- Taxes (line 23). Business licenses and the employer share of payroll taxes count; your income tax and taxes on personal property do not.1
Standard mileage rates
| Period | Business rate per mile |
|---|---|
| 2025 | 70 cents1 |
| January 1 to June 30, 2026 | 72.5 cents2 |
| From July 1, 2026 | 76 cents (IRS Announcement 2026-11)3 |
Because the 2026 rate changed mid-year, log the date of every trip so you can apply the right rate to each half of the year.
Set up a Schedule C spreadsheet
- One row per transaction: date, payee, amount, payment method and a Schedule C line column.
- Use a drop-down for the line column so every expense gets one of the categories above, with no typos.
- Total each line with SUMIFS, for example
=SUMIFS(Amount,Line,"22 Supplies"). - Keep income separate and reconcile it to your 1099-K, 1099-NEC and bank deposits.
- Add a mileage tab with date, miles and purpose, and multiply by the rate for that date.
- Set aside tax as a percentage of profit each month so April is not a surprise.
Every expense, already sorted by Schedule C line
The Small Business Bookkeeping Spreadsheet logs income and expenses, totals them by Schedule C category, builds your P&L and shows a tax set-aside. Excel and Google Sheets.
Questions
What are the expense categories on Schedule C?
Part II of Schedule C has lines 8 to 27b: advertising, car and truck expenses, commissions and fees, contract labor, depletion, depreciation and section 179, employee benefits, insurance, interest, legal and professional services, office expense, pension plans, rent or lease, repairs, supplies, taxes and licenses, travel, meals, utilities, wages, the energy efficient buildings deduction and other expenses. Home office goes on line 30.
Where do software subscriptions go on Schedule C?
They are commonly listed under other expenses on line 27b, itemized in Part V. Check with your tax professional if a subscription is better treated another way.
What is the 2026 standard mileage rate for business?
The IRS set 72.5 cents per mile for 2026, then raised it to 76 cents per mile for business driving from July 1, 2026; the 72.5 cent rate still applies to miles driven January 1 to June 30. For 2025 tax returns the rate is 70 cents.
Can I deduct my own pay on Schedule C?
No. Line 26 is for employee wages only. What you take out as a sole proprietor is a draw, not an expense; your profit on line 31 is what you are taxed on.
How much is the simplified home office deduction?
$5 per square foot of home used regularly and only for business, up to 300 square feet, so up to $1,500, reported on line 30.
Related guides
Sources
- IRS: 2025 Instructions for Schedule C (Form 1040)
- IRS: IRS sets 2026 business standard mileage rate at 72.5 cents per mile, December 2025
- American Payroll Association: IRS increases mileage rate to 76 cents for second half of 2026, July 2026
Tahir Abbas
Founder of Softotech Solutions. Tahir builds Excel and Google Sheets bookkeeping tools for small businesses. This guide is general information about the form, not tax advice; check your own return with a tax professional.