Schedule C and expense categories in QuickBooks Solopreneur and QuickBooks Self-Employed

Use this category to categorize expenses related to promoting and selling your products or services. This includes things like online ad costs, business cards, brochures, mailers, and flyers.

You can categorize these types of transactions as advertising:

• Advertising
• Listing fees
• Web advertising, banner ads, and pay-per-click fees
• Promotional purchases and giveaways (T-shirts, caps, bags, pens)
• Fees paid to advertising and public relations agencies
• Business logo design
• Marketing emails and direct mail campaigns
• Promotions and promotional events
• Newspaper and magazine advertising
• TV advertising
• Professional performance videos and CDs
• Package design fees
• Catalogs
• Billboards, signs, and display racks
• Phone book advertising
• Sponsorships
• Banners, posters, bumper stickers, and door-hangers
• Yellow Pages listings

Assets are tangible items you use to run your business and generate income. These are usually larger purchases like computers, manufacturing equipment, furniture, and tools. Learn more about assets.

You can use the following categories for assets in QuickBooks Self-Employed:

• Apps/software/web services (more than $200)
• Computers (more than $200)
• Copiers (more than $200)
• Furniture (more than $200)
• Other tools and equipment (more than $200)
• Phones (more than $200)
• Photo and video equipment (more than $200)

Tracking asset depreciation

Assets also lose their value over time due to use and natural wear and tear. This loss of value is known as depreciation. You need to track your assets' value and depreciation.

However, QuickBooks Self-Employed doesn't track depreciation. Keep a record of basic info, like the purchase price and length of time you've owned the item. At the end of the tax year, TurboTax or your tax pro should help you set up the depreciation schedule (or claim a Section 179 deduction). Learn more about tracking depreciation from TurboTax.

QuickBooks Self-Employed also doesn't track vehicle depreciation. Learn more about vehicle depreciation.

Use this category to categorize expenses related to using your vehicle for business. This includes expenses like fuel, insurance, and fees. You can use the QuickBooks Self-Employed app to automatically track your business mileage. Follow these steps to track the value of your vehicle in QuickBooks.

QuickBooks uses the standard mileage method for deducting vehicle expenses. This simplifies your deductions. When you file your taxes, you can decide if the standard mileage or actual expenses method is best for you.

You can categorize these types of expenses as car and truck:

• Vehicle insurance
• Vehicle loan and loan interest
• Vehicle repairs
• Gas and fuel
• Parking and tolls
• Vehicle registration
• Vehicle lease
• Wash and road services

Note: Parking and tolls are deductible if they're related to business travel. Expenses and fees outside the business use of your car, like the commute between home and workplace as a regular W-2 employee, aren't deductible. These are considered commuting expenses. Mark them as Personal so QuickBooks doesn't deduct them.

Use this category to categorize commissions and fees you pay outside of regular 1099-MISC payments. Note: Don't use this category to track what you pay for contractors to work for you. Categorize payments for contractors' actual work as Contract labor.

You can categorize these types of transactions as commissions and fees:

• Referral/broker/selling fees
• Finder's fees
• Sales commissions
• Fees for legal referrals
• Fees for drop shippers
• Fees for online referrals
• Shared commissions (common in real estate)
• Commissions paid to managers and agents who are not employees

Important: If you pay an independent contractor $600 or more for commissions for a project and don't withhold any type of taxes, you're required to send the contractor and the IRS a 1099-MISC. You need to handle 1099s in QuickBooks Online or another program.

Use this category to categorize payments you make to contractors who worked for you during the year. Usually, these are people you file a 1099-MISC for.

Important: If you paid a contractor or freelancer $600 or more for labor or services on a project, but didn't withhold any taxes, you're required to send the contractor and the IRS a 1099-MISC. You need to handle 1099s in QuickBooks Online or another program.

You can categorize the following types of transactions as contract labor:

• Fees paid to subcontractors and independent contractors
• Fees paid for additional project support
• Fees paid for creative resources
• Fees paid for outside research and data collection

Note: Don't use this category for commissions or fees you pay outside of payments for contractor labor. Categorize commissions and fees as Commissions and fees.

Home office expenses are a complicated category. Learn how you can track home office deductions.

Use this category to categorize expenses to insure your business and it's operations. This includes workers comp and general liability insurance. Don't include your health insurance in this category.

Important: If you work from a home office and made payments for homeowner's insurance, don't use this category for the payments. Homeowner's insurance is covered when you take the simple deduction based on square footage.

You can categorize these types of transactions as insurance:

• Business insurance
• Property insurance
• General liability insurance
• Workers’ compensation insurance
• Fire, theft, and flood insurance (for an offsite office or storage space)
• Renter's insurance (for an offsite office or storage space)
• Errors and omissions insurance
• Malpractice insurance
• Business interruption insurance

Use this category to categorize business credit card interest, loan interest (not the loan itself), and other business-related interest.

You can categorize these types of transactions as interest:

• Other interest
• Business loan interest
• Mortgage interest
• Credit card interest

Use this category to categorize fees paid for short-term professional advice (including lawyers and accountants). It's for assistance with specific business deals, sales transactions, or yearly taxes.

Note: If your lawyer or accountant gives you a W-9, they're considered contractors. In this case, don't use this category for their payments.

You can categorize these types of transactions as legal fees and professional services:

• Professional association membership fees
• Organization dues (including state bar dues)
• Legal fees for business matters
• Accountant fees
• Short-term consulting fees
• One-time management consultation fees
• One-time marketing consultation fees
• One-time engineering consultation fees
• One-time technical consultation fees
• Fees paid for Web site analysis
• Other outside consulting fees for short-term advice on specific deals
• One-time logo and web design fees
• Fees paid to talent agents or business and personal managers who aren't paid as employees

Use this category to categorize business-related meal expenses.

These are ordinary and necessary meals during travel for your self-employment work. They can also be meals you pay for when meeting clients or business associates. The meals and related trips must have a clear business purpose. Costs must be reasonable. Always refer to the IRS website for the latest rules on meal deductions.

You don't need to hold on to receipts for meals under $75. However, it's a good idea to keep good records of all meals, regardless of cost. You should be able to tell the IRS the business purpose, date, amount, and who was present for each meal you're deducting.

Examples of tax-deductible meals:

• Meals while traveling for training, conventions, trade shows, or conferences
• Meals while traveling to meet prospects, clients, or business associates
• Meals while traveling to check up on an out-of-town property or location

Examples of meals that may be deductible

• Meals with potential clients, current clients, or business partners where you discuss business
• Meals for a client or business partner’s spouse (and your own, if other spouses are present)

Use this category to categorize office supplies you bought during the tax year.

Office expenses are small purchases and items you use up quickly, like tape or postage stamps. Items you hold onto for longer periods of time, like computers or file cabinets, are assets.

You can categorize these types of transactions as office supplies:

• Postage
• Paper
• Shipping fees
• Stamps, labels, envelopes, and mailers
• Shipping materials
• Storage and filing boxes
• Memo and message pads, Post-it notepads
• Whiteboards and markers
• Cleaning supplies
• Calendars and planners
• Staples, staplers, paper clips, and scissors
• Tape, tape dispensers, and rulers
• Calculators
• Business membership fees to superstores like Costco and Sam's club
• Pickup and delivery services
• Bottled water delivery
• Shredding services
• Backup data and archiving services
• Office cleaning
• Handicap access expenses
• Office decorating expenses
• Separate cable line for your office
• Separate security system for your office

If you can't find another category for an expense, use the other business expenses category.

You can categorize these types of transactions as other expenses:

• Memberships/subscriptions
• Printing
• Uniforms
• Apps/software/web services
• Computers
• Copiers
• Furniture
• Other tools and equipment
• Phone
• Photo/video equipment
• Other business expenses

Don't include:

• Charitable contributions
• Political contributions

Use this category to categorize rental and lease expenses for equipment, office space, and property rentals. This includes things like office space, computers, copiers, small business equipment, and buildings. It doesn't include vehicle rental expenses. Use the car and truck category to track those.

You can categorize these types of transactions as rent and lease:

• Equipment rent and lease
• Building rent and lease
• Portable storage units
• Small machinery and appliance rentals for business
• Warehouse space
• Showroom space
• Office buildings
• Retail shops
• Costs for repairs and maintenance, but for office or property that's not your home. This doesn't include renovations or improvements.
• Minor roofing, HVAC upgrades for a business space
• Computer repair and upgrade visits from technical specialists
• Floor refinishing for a business space
• Carpet and furniture cleaning in a business space
• Janitorial services for a business space
• Paint, spackle, and electrical work

Use this category to categorize expenses related to general office repairs and upkeep. This covers necessary maintenance and upkeep.

You can categorize the following types of transactions as repairs and maintenance:

• Plumbing repairs
• Routine servicing for heating or air conditioning
• Painting
• Cleaning gutters
• Light fixture repairs

Use this category to categorize items you buy and then sell or use to make the products you sell. This includes raw materials, packaging, and shipping.

You can categorize these types of transactions as supplies:

• Art supplies
• Fabric and other craft materials
• Wood and metal supplies
• Food and beverages you sell as packaged goods, or you use as ingredients
• Fitness equipment you sell to clients
• Learning materials (books, notebooks, flashcards, and so on) you sell to students
• Organization materials or systems that you sell to clients
• Home furnishings you restore or upcycle and re-sell
• Specialized paper for photos or print-making

Use this category to categorize deductible tax and license fees related to your self-employed work.

You can categorize these types of transactions as taxes and licenses:

• Business licenses
• Property tax
• Estimated taxes
• Federal tax
• Sales tax
• State tax
• Other taxes
• Doing business as (DBA) or Fictitious Business Name one-time filing fee
• Incorporation fees
• Business name search fees
• Copyright application and registration
• Trademarks and logo fees
• Domain name search fees
• Software licensing and renewal fees
• Real estate taxes for an office you own (not your home office)
• Any other taxes imposed by your city, state, or county in order for you to conduct business
• Fees to acquire, draft, or cancel a lease

Use this category to categorize expenses related to business travel.

These trips must be for self-employed work and separate from personal travel. Always refer to the IRS website for the latest rules on travel deductions.

You're not required to keep receipts for purchases less than $75. However, it's a good idea to keep good records of all meals, regardless of cost. You should be able to tell the IRS the business purpose, date, and total cost of each trip.

You can categorize the following types of transactions as travel:

• Air, train, or bus fare for business travel
• Hotel costs for business travel (except not meals)
• Rental car expenses
• Taxi, shuttle fares and transportation tips while out of town on business
• Gas, oil, parking fees, and tolls while out of town
• Computer rental costs when away on business
• Internet access fees when away on business
• Phone calls when away on business
• Tips while traveling (except for meal tips, which are only 50% deductible)
• Dry cleaning if you have to stay overnight for business
• Cost of shipping baggage, supplies, products, equipment necessary for business
• Cost of storing baggage and equipment during a business trip
• Late check-out charges, if you are required to stay overtime for business

Use this category to categorize utility payments at an office or business property. If you use your home as your office, follow these steps to categorize your home office expenses.

You can categorize the following types of transactions as utilities:

• Gas and electricity
• Water
• Trash collection
• Monthly pest control service
• Security alarm monitoring service
• Sewer and septic service

If you want to get details on transactions in each Schedule C category, run one of your financial reports. Here's how each category shows up on your reports.

Note: Since federal and state tax payments are non-deductible, they won’t show on your tax reports.

*Federal and State tax payments are non-deductible and won’t show on the Tax Summary Report.