What are the expense categories on Schedule C?

Schedule C Part II lists about twenty expense lines: advertising, car and truck, commissions and fees, contract labor, depletion, depreciation, employee benefit programs, insurance, interest, legal and professional services, office expense, pension and profit-sharing, rent or lease, repairs and maintenance, supplies, taxes and licenses, travel, deductible meals, utilities, wages, and a catch-all Other expenses line. Business use of your home is claimed separately on line 30 via Form 8829.

What is the difference between Office expense and Supplies on Schedule C?

Office expense (line 18) covers the cost of running the office: postage, software, small office equipment, and stationery. Supplies (line 22) covers items consumed in actually doing the work, materials and tools that get used up. The line is fuzzy for many businesses, so the real rule is to pick one treatment for a given type of cost and apply it consistently year to year.

Can I deduct my home office on Schedule C?

Yes, if you use part of your home regularly and exclusively for business. It does not go on the Part II expense lines, though. It is calculated on Form 8829 (or the simplified square-footage method) and carried to line 30. A key limit: the home-office deduction generally cannot create or increase a business loss, so it can be capped by your net income.

How much of business meals can I deduct on Schedule C?

Business meals are generally 50 percent deductible and go on line 24b. The temporary 100 percent deduction for restaurant meals expired after 2022, so for current years it is back to 50 percent. Entertainment is not deductible at all. Keep the who, what, and business purpose with each meal record.

What cannot be deducted on Schedule C?

Personal expenses, the owner's own draws (money you take out of the business is not an expense), federal income and self-employment taxes, commuting between home and a regular workplace, fines and penalties, political contributions, and the cost of capital assets in a single year (those are depreciated). Half of your self-employment tax is deductible, but on the 1040 itself, not on Schedule C.

What are commissions and fees on Schedule C?

Line 10, Commissions and fees, is for amounts you paid out in the course of business: sales commissions to reps or affiliates, referral fees, and the cut kept by platforms and payment processors, such as a marketplace fee or a card-processing percentage. It is for what you paid, not what you received. If a cost could sit on line 10 or another line, pick one treatment and keep it consistent year to year.

What is the difference between Schedule B and Schedule C?

They are different forms for different things. Schedule C reports the profit or loss from a business you run as a sole proprietor, and its Part II is where business expenses go. Schedule B reports interest and ordinary dividend income, and is generally required once that income is over 1,500 dollars. If you are looking for where business expenses belong, that is Schedule C, not Schedule B.

BusinessSoftware

Schedule C Expense Categories: Every Line Explained

By Rashad Bayram•July 9, 2026•Updated July 14, 2026•10 min read

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Frequently Asked Questions

What are the expense categories on Schedule C?: Schedule C Part II lists about twenty expense lines: advertising, car and truck, commissions and fees, contract labor, depletion, depreciation, employee benefit programs, insurance, interest, legal and professional services, office expense, pension and profit-sharing, rent or lease, repairs and maintenance, supplies, taxes and licenses, travel, deductible meals, utilities, wages, and a catch-all Other expenses line. Business use of your home is claimed separately on line 30 via Form 8829.
What is the difference between Office expense and Supplies on Schedule C?: Office expense (line 18) covers the cost of running the office: postage, software, small office equipment, and stationery. Supplies (line 22) covers items consumed in actually doing the work, materials and tools that get used up. The line is fuzzy for many businesses, so the real rule is to pick one treatment for a given type of cost and apply it consistently year to year.
Where do software subscriptions go on Schedule C?: There is no dedicated software line, so most preparers put recurring software and SaaS subscriptions in Office expense (line 18), or in Other expenses (line 27a) with a clear label like software subscriptions. Either is defensible. What matters is that it is deductible as an ordinary business cost and that you are consistent about where it lands.
Can I deduct my home office on Schedule C?: Yes, if you use part of your home regularly and exclusively for business. It does not go on the Part II expense lines, though. It is calculated on Form 8829 (or the simplified square-footage method) and carried to line 30. A key limit: the home-office deduction generally cannot create or increase a business loss, so it can be capped by your net income.
How much of business meals can I deduct on Schedule C?: Business meals are generally 50 percent deductible and go on line 24b. The temporary 100 percent deduction for restaurant meals expired after 2022, so for current years it is back to 50 percent. Entertainment is not deductible at all. Keep the who, what, and business purpose with each meal record.
What cannot be deducted on Schedule C?: Personal expenses, the owner's own draws (money you take out of the business is not an expense), federal income and self-employment taxes, commuting between home and a regular workplace, fines and penalties, political contributions, and the cost of capital assets in a single year (those are depreciated). Half of your self-employment tax is deductible, but on the 1040 itself, not on Schedule C.
What are commissions and fees on Schedule C?: Line 10, Commissions and fees, is for amounts you paid out in the course of business: sales commissions to reps or affiliates, referral fees, and the cut kept by platforms and payment processors, such as a marketplace fee or a card-processing percentage. It is for what you paid, not what you received. If a cost could sit on line 10 or another line, pick one treatment and keep it consistent year to year.
What is the difference between Schedule B and Schedule C?: They are different forms for different things. Schedule C reports the profit or loss from a business you run as a sole proprietor, and its Part II is where business expenses go. Schedule B reports interest and ordinary dividend income, and is generally required once that income is over 1,500 dollars. If you are looking for where business expenses belong, that is Schedule C, not Schedule B.

About the author

Rashad Bayram

Writer & technology consultant focused on Islamic finance, halal Bitcoin, AI agents, and startups. Exploring ideas that matter with care and curiosity.

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