- October 24, 2017
Each penny is important for a common person and that is the main reason why we see numerous Form 1099 tax returns from the independent contractors. Few contractors are losing their dollars every year by failing to track their business expenses. By making note of every expense each year, you can save a lot of money for yourself instead of giving them to the taxes.
Schedule C is used to state the profit income or loss from your business with the Internal Revenue Service (IRS). This is filed with the use of your 1099 Forms. To get the better view about the types of expenses, just have a look at the below table. The table will list each type of business expense that comes in the Schedule C. In addition, you will also find the examples for a type of expense includes and does not include.
Schedule C – Common 1099 Expenses
| Line | Type | Acceptable Expenses | Unacceptable Expenses |
| 8 | Advertising | · ads,
· branded promo items, · events, · flyers, · signs, and · trade shows |
· Non-branded gifts
· Office holiday parties, |
| 9 | Car Expenses | · bus fare repairs,
· gas, · insurance, · maintenance, · registration, |
Expenses when using Standard Mileage Rate |
| 13 | Depreciation and Section 179 | · cars
· computers, · furniture, · office equipment, · tools, |
Car depreciation when you are using Standard Mileage Rate |
| 15 | Business Insurance | · fire,
· flood, · general liability, · malpractice, · property, · theft, · workers comp |
· auto insurance,
· disability insurance · health insurance, |
| 18 | Office Expenses | · cleaning services for office,
· general office maintenance |
· home office costs,
· rent, · utilities |
| 22 | Supplies | that you use and replace | · Office decorations and
· other office related expenses |
| 24b | Meals/ Entertainment | Meals or entertainment related expenses that you had with your client | · meals for yourself,
· dues for athletic clubs |
| 24a | Travel | · airfare or rental cars,
· local transportation · lodging, |
· meals
· personal costs, |
| 27a | Other Expenses | · association dues
· banking fees, · education to improve skills, |
Expenses that comes with own separate categories |
| 30 | Home Office Deduction | · business portion of rent,
· insurance, · mortgage interest · repairs, · utilities, |
Expenses when using the Simplified Method |
Schedule C – Less Common 1099 Expenses
| Line | Type | Acceptable Expenses | Unacceptable Expenses |
| 10 | Commission and Fees | Commissions or fees that are paid to generate revenue | City license fees and the commissions paid to the employees |
| 11 | Contract Labor | Payments dare done to the independent contractors | Wages that are paid to the employees, lawyer or other professional |
| 12 | Depletion | National resources used when the business mines them | Gas that is used for driving, home/office utilities |
| 14 | Employee Benefit Programs | · accident or liability insurance
· educational assistance, · health or life insurance |
Own health and retirement benefits |
| 16a | Interest (mortgage) | Interest paid on a mortgage that is used for property used for business | Interest on primary home |
| 16b | Interest (car, other) | · business lines of credit,
· car payment interest, · credit cards |
Interest on personal loans, home office mortgage interest |
| 17 | Legal/Professional Services | Fees paid to the
· accountants, · attorneys, · tax preparers, |
Services provided by the persons employed by you. |
| 19 | Pension Plans | · 401(k),
· keogh plans, · profit sharing plans |
Contributions that are made to own pension plan |
| 20a | Rent or Lease (vehicles, equipment) | · equipment,
· machines, · vehicles |
Car lease payments if you use Standard Mileage Rate |
| 20b | Rent or Lease (other business property) | Office or land rent with inclusion of any government taxes | Rent for home office, rent for trade show booths |
| 21 | Repairs and Maintenance | · fixing or
· repainting office, · replacing equipment |
Car related repairs, and other significant improvements |
| 23 | Taxes/Licenses | · business taxes,
· required business licenses · state/local licenses, |
Self-employment tax or personal income tax |
| 25 | Utilities | · garbage,
· gas, · office electric, · water |
Utilities that are required for your own house |
| 26 | Employee Wages | · bonuses,
· commissions, · salaries |
Employee benefits,
payments that are made to yourself |
Hope this article gave a clear picture about the business expenses of Form 1099 Schedule C. For further assistance and Clarifications, you are just a call away from us to reach our customer support team at 703-229-0326 or drop a mail at support@tax2efile.com. We are happy to assist and serve you at any time.
