Where do licences and permits go on Schedule C?
Line 23 — Taxes and licenses
Business licences, trade permits, professional registration fees, and business taxes go on Schedule C Line 23, 'Taxes and licenses'. This also includes the employer share of payroll taxes and many state and local business taxes. Federal income tax and self-employment tax are not deducted here. Sales tax you collect from customers is not your expense either — it is money held for the state and should be tracked separately from revenue.
Examples
- A cosmetology or contractor licence renewal.
- A city business registration fee.
- Vehicle registration attributable to business use.
Watch out for
- Costs to qualify for an entirely new profession are generally not deductible.
- Penalties and fines are not deductible.
- Sales tax paid on business purchases is usually part of the cost of the item rather than a separate Line 23 amount.
Stop guessing the category
DocuSpending reads each receipt and assigns the Schedule C category for you, then totals the year on demand.
General information, not tax advice. Amounts, limits, and percentages change between tax years — check the current IRS Schedule C instructions or ask a tax professional about your situation.
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