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Modulo 1040 Programma Istruzioni C

Istruzioni per la pianificazione C (Form 1040 o Form 1040-SR), Profit o Loss From Business (Sole Proprietorship)

Rev. 2023

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Scaricamento
Department of the Treasury  
Internal Revenue Service  
2023 Instructions for Schedule C  
Use Schedule C (Form 1040) to report income or (loss) from a business you operated  
or a profession you practiced as a sole proprietor. An activity qualifies as a business if  
your primary purpose for engaging in the activity is for income or profit and you are  
involved in the activity with continuity and regularity. For example, a sporadic activi-  
ty, a not-for-profit activity, or a hobby does not qualify as a business. To report income  
from a nonbusiness activity, see the instructions for Schedule 1 (Form 1040), line 8j.  
Profit or Loss  
From Business  
Also, use Schedule C to report (a) wages and expenses you had as a statutory em-  
ployee; (b) income and deductions of certain qualified joint ventures; and (c) certain  
amounts shown on a Form 1099, such as Form 1099-MISC, Form 1099-NEC, and  
Form 1099-K. See the instructions on your Form 1099 for more information about  
what to report on Schedule C.  
You may be subject to state and local taxes and other requirements such as business  
licenses and fees. Check with your state and local governments for more information.  
Section references are to the Internal  
Revenue Code unless otherwise noted.  
cial clean vehicle may qualify for a  
clean vehicle tax credit. See Form 8936  
and its instructions for more informa-  
tion.  
Form 1040, 1040-SR, Schedules C, E, F,  
or Form 2106, as well as small business  
taxpayers with assets under $10 million.  
For additional information, go to the  
Small Business and Self-Employed Tax  
Center at IRS.gov/SmallBiz.  
Future Developments  
For the latest information about devel-  
opments related to Schedule C and its  
instructions, such as legislation enacted  
after they were published, go to IRS.gov/  
Reminders  
Gig economy tax center. The gig (or  
on-demand, sharing, or access) economy  
refers to an activity where people earn  
income providing on-demand work,  
services, or goods. Go to IRS.gov/Gig to  
get more information about the tax con-  
sequences of participating in the gig  
economy.  
General  
Instructions  
What's New  
Other Schedules and Forms  
You May Have To File  
Redesigned Form 1040-SS. For 2023,  
Schedule C (Form 1040) is available to  
be filed with Form 1040-SS, if applica-  
ble. It replaces Form 1040-SS, Part IV.  
For additional information, see the In-  
structions for Form 1040-SS.  
Schedule A (Form 1040) to deduct  
interest, taxes, and casualty losses not  
related to your business.  
Excess business loss limitation. If you  
report a loss on line 31 of your Sched-  
ule C (Form 1040), you may be subject  
to a business loss limitation. The disal-  
lowed loss resulting from the limitation  
will not be reflected on line 31 of your  
Schedule C. Instead, use Form 461 to  
determine the amount of your excess  
business loss, which will be included as  
income on Schedule 1 (Form 1040),  
line 8p. Any disallowed loss resulting  
from this limitation will be treated as a  
net operating loss that must be carried  
forward and deducted in a subsequent  
year.  
Schedule E (Form 1040) to report  
rental real estate and royalty income or  
(loss) that is not subject to  
self-employment tax.  
Standard mileage rate. The business  
standard mileage rate for 2023 is 65.5  
cents per mile.  
Schedule F (Form 1040) to report  
profit or (loss) from farming.  
Business meals deduction. The tempo-  
rary 100% deduction for food or bever-  
ages provided by a restaurant has ex-  
pired. The business meals deduction is  
now 50%.  
Schedule J (Form 1040) to figure  
your tax by averaging your farming or  
fishing income over the previous 3  
years. Doing so may reduce your tax.  
Schedule SE (Form 1040) to pay  
self-employment tax on income from  
any trade or business.  
Energy efficient commercial buildings  
deduction. The energy efficient com-  
mercial buildings deduction is now re-  
ported on new line 27b.  
Form 461 to report an excess  
business loss.  
See Form 461 and its instructions for  
details on the excess business loss limi-  
tation.  
Bonus depreciation. The bonus depre-  
ciation deduction under section 168(k)  
begins its phaseout in 2023 with a re-  
duction of the applicable limit from  
100% to 80%.  
Form 3800 to claim any of the  
general business credits.  
Form 4562 to claim depreciation  
Small Business and Self-Employed  
(SB/SE) Tax Center. Do you need help  
with a tax issue or preparing your return,  
or do you need a free publication or  
form? SB/SE serves taxpayers who file  
and amortization on assets placed in  
service in 2023, to claim amortization  
that began in 2023, to make an election  
under section 179 to expense certain  
Commercial clean vehicle credit.  
Businesses that buy a qualified commer-  
Jan 24, 2024  
Cat. No. 24329W  
C-1  
property, or to report information on  
listed property.  
Each materially participate in the  
business (see Material participation, lat-  
er, in the instructions for line G);  
Are the only owners of the busi-  
ness; and  
Heavy highway vehicle use tax. If you  
use certain highway trucks, truck-trail-  
ers, tractor-trailers, or buses in your  
trade or business, you may have to pay a  
federal highway motor vehicle use tax.  
See the Instructions for Form 2290 to  
find out if you must pay this tax and go  
to IRS.gov/Trucker for the most recent  
developments.  
Form 4684 to report a casualty or  
theft gain or (loss) involving property  
used in your trade or business or  
income-producing property.  
File a joint return for the tax year.  
Form 4797 to report sales,  
Making the election will allow you to  
avoid the complexity of Form 1065, but  
still give each of you credit for social se-  
curity earnings on which retirement ben-  
efits, disability benefits, survivor bene-  
fits, and insurance (Medicare) benefits  
are based. In most cases, this election  
will not increase the total tax owed on  
the joint return.  
exchanges, and involuntary conversions  
(not from a casualty or theft) of trade or  
business property.  
Information returns. You may have to  
file information returns for wages paid  
to employees, and certain payments of  
fees and other nonemployee compensa-  
tion, interest, rents, royalties, real estate  
transactions, annuities, and pensions.  
See Line I, later, and the 2023 General  
Instructions for Certain Information Re-  
turns for details and other payments that  
may require you to file a Form 1099.  
Form 6198 to apply a limitation to  
your loss if you have a business loss and  
you have amounts invested in the  
business for which you are not at risk.  
Form 6252 to report income from  
an installment agreement.  
Jointly owned property. You and your  
spouse must operate a business to make  
this election. Do not make the election  
for jointly owned property that is not a  
trade or business.  
Form 7205 to claim the IRC 179D  
deduction for qualifying energy efficient  
commercial building expenses.  
Form 8582 to apply a limitation to  
your loss from passive activities.  
If you received cash of more than  
$10,000 in one or more related transac-  
tions in your trade or business, you may  
have to file Form 8300. For details, see  
Pub. 1544. See also the IRS Form 8300  
Reference Guide, available at IRS.gov/  
Guide.  
Only businesses that are owned  
Form 8594 to report certain  
purchases or sales of groups of assets  
that constitute a trade or business.  
and operated by spouses as  
co-owners (and not in the name  
!
CAUTION  
of a state law entity) qualify for the elec-  
tion. Thus, a business owned and oper-  
ated by spouses through an LLC does  
not qualify for the election of a qualified  
joint venture.  
Form 8824 to report like-kind  
exchanges.  
Form 8829 to claim actual  
expenses for business use of your home.  
Form 8936 to claim the  
commercial clean vehicle credit.  
Business Owned and  
Operated by Spouses  
Making the election. To make this  
election, divide all items of income,  
gain, loss, deduction, and credit attribut-  
able to the business between you and  
your spouse based on your respective in-  
terests in the business. Each of you must  
file a separate Schedule C or F. Enter  
your share of the applicable income, de-  
duction, or (loss) on the appropriate  
lines of your separate Schedule C or F.  
Each of you may also need to file a sep-  
arate Schedule SE to pay self-employ-  
ment tax. If the business was taxed as a  
partnership before you made the elec-  
tion, the partnership will be treated as  
terminating at the end of the preceding  
tax year. For information on how to re-  
port the termination of the partnership,  
see Pub. 541.  
Form 8960 to pay Net Investment  
Income Tax on certain income from  
your passive activities.  
Generally, if you and your spouse jointly  
own and operate an unincorporated busi-  
ness and share in the profits and losses,  
you are partners in a partnership, wheth-  
er or not you have a formal partnership  
agreement. You generally have to file  
Form 1065 instead of Schedule C for  
your joint business activity; however,  
you may not have to file Form 1065 if  
either of the following applies.  
Form 8990 to determine whether  
your business interest deduction is  
limited.  
Form 8995 or 8995-A to claim a  
deduction for qualified business income.  
Single-member limited liability com-  
pany (LLC). Generally, a single-mem-  
ber domestic LLC is not treated as a sep-  
arate entity for federal income tax  
purposes. If you are the sole member of  
a domestic LLC, file Schedule C (or  
Schedule E or F, if applicable) unless  
you have elected to treat the domestic  
LLC as a corporation. See Form 8832  
for details on making this election and  
for information about the tax treatment  
of a foreign LLC.  
You and your spouse elect to be  
treated as a qualified joint venture. See  
You and your spouse wholly own  
the unincorporated business as commun-  
ity property and you treat the business as  
a sole proprietorship. See Community  
Income, later.  
Revoking the election. The election  
can be revoked only with the permission  
of the IRS. However, the election re-  
mains in effect only for as long as you  
and your spouse continue to meet the re-  
quirements to make the election. If you  
and your spouse fail to meet the require-  
ments for any year, you will need to  
make a new election to be treated as a  
qualified joint venture in any future  
year.  
Otherwise, use Form 1065. See Pub. 541  
for information about partnerships.  
Single-member LLCs with employees.  
A single-member LLC must file em-  
ployment tax returns using the LLC's  
name and employer identification num-  
ber (EIN) rather than the owner's name  
and EIN, even if the LLC is not treated  
as a separate entity for federal income  
tax purposes.  
Qualified Joint Venture  
You and your spouse can elect to treat an  
unincorporated business as a qualified  
joint venture instead of a partnership if  
you:  
C-2  
 
Reportable Transaction  
Disclosure Statement  
Employer  
identification  
number  
(EIN). You and your spouse do not  
need to obtain an EIN to make the elec-  
tion. But you may need an EIN to file  
other returns, such as employment or ex-  
cise tax returns. To apply for an EIN, see  
the Instructions for Form SS-4 or go to  
Specific  
Use Form 8886 to disclose information  
for each reportable transaction in which  
you participated. Form 8886 must be  
filed for each tax year that your federal  
income tax liability is affected by your  
participation in the transaction. You may  
have to pay a penalty if you are required  
to file Form 8886 but do not do so. You  
may also have to pay interest and penal-  
ties on any reportable transaction under-  
statements. The following are reportable  
transactions.  
Instructions  
Filers of Form 1041. Do not complete  
the block labeled “Social security num-  
ber (SSN).” Instead, enter the EIN is-  
sued to the estate or trust on line C.  
Rental real estate business. If you and  
your spouse make the election for your  
rental real estate business, you must  
each report your share of income and  
deductions on Schedule E. Rental real  
estate income is not generally included  
in net earnings from self-employment  
subject to self-employment tax and is  
generally subject to the passive loss lim-  
itation rules. Electing qualified joint  
venture status does not alter the applica-  
tion of the self-employment tax or the  
passive loss limitation rules.  
Line A  
Describe the business or professional ac-  
tivity that provided your principal  
source of income reported on line 1. If  
you owned more than one business,  
complete a separate Schedule C for each  
business. Give the general field or activ-  
ity and the type of product or service. If  
your general field or activity is whole-  
sale or retail trade, or services connected  
with production services (mining, con-  
struction, or manufacturing), also give  
the type of customer or client; for exam-  
ple, “wholesale sale of hardware to re-  
tailers” or “appraisal of real estate for  
lending institutions.”  
Any listed transaction that is the  
same as or substantially similar to tax  
avoidance transactions identified by the  
IRS.  
Any transaction offered to you or a  
related party under conditions of confi-  
dentiality for which you paid an advisor  
a fee of at least $50,000.  
More information. For more informa-  
tion on qualified joint ventures, go to  
Certain transactions for which you  
or a related party have contractual pro-  
tection against disallowance of the tax  
benefits.  
Community Income  
Certain transactions resulting in a  
If you and your spouse wholly own an  
unincorporated business as community  
property under the community property  
laws of a state, foreign country, or U.S.  
territory, you can treat your wholly  
owned, unincorporated business as a  
sole proprietorship, instead of a partner-  
ship. Any change in your reporting posi-  
tion will be treated as a conversion of  
the entity.  
Line B  
loss of at least $2 million in any single  
tax year or $4 million in any combina-  
tion of tax years. (At least $50,000 for a  
single tax year if the loss arose from a  
foreign currency transaction defined in  
section 988(c)(1), whether or not the  
loss flows through from an S corpora-  
tion or partnership.)  
Enter on line B the six-digit code from  
Activity Codes chart at the end of these  
instructions. For nonstore retailers, se-  
lect the PBA code by the primary prod-  
uct that your establishment sells. For ex-  
ample, establishments primarily selling  
prescription and non-prescription drugs,  
select PBA code 456110 Pharmacies &  
drug retailers.  
Certain transactions of interest en-  
tered into that are the same or substan-  
tially similar to one of the types of trans-  
actions that the IRS has identified by  
published guidance as a transaction of  
interest.  
Report your income and deductions  
as follows.  
If only one spouse participates in  
Line D  
the business, all of the income from that  
business is the self-employment earn-  
ings of the spouse who carried on the  
business.  
Enter on line D the EIN that was issued  
to you on Form SS-4. Do not enter your  
SSN on this line. Do not enter another  
taxpayer's EIN (for example, from any  
Forms 1099-MISC that you received). If  
you do not have an EIN, leave line D  
blank.  
See the Instructions for Form 8886  
for more details.  
If both spouses participate, the in-  
Capital Construction Fund  
come and deductions are allocated to the  
spouses based on their distributive  
shares.  
Do not claim on Schedule C the deduc-  
tion for amounts contributed to a capital  
construction fund set up under chap-  
ter 535 of title 46 of the United States  
Code. Instead, reduce the amount you  
would otherwise enter on Form 1040 or  
1040-SR, line 15, by the amount of the  
deduction. Next to line 15, enter “CCF”  
and the amount of the deduction. For de-  
tails, see Pub. 595.  
If either or both spouses are part-  
ners in a partnership, see Pub. 541.  
You need an EIN only if you have a  
qualified retirement plan or are required  
to file employment, excise, alcohol, to-  
bacco, or firearms returns, or are a payer  
of gambling winnings. If you need an  
EIN, see the Instructions for Form SS-4.  
If both spouses elected to treat the  
business as a qualifying joint venture,  
see Qualified Joint Venture, earlier.  
States with community property laws  
include Arizona, California, Idaho, Lou-  
isiana, Nevada, New Mexico, Texas,  
Washington, and Wisconsin. See Pub.  
555 for more information about com-  
munity property laws.  
Single-member LLCs. If you are the  
sole owner of an LLC that is not treated  
as a separate entity for federal income  
tax purposes, enter on line D the EIN  
that was issued to the LLC (in the LLC's  
Additional Information  
See Pub. 334 for more information for  
small businesses.  
C-3  
 
legal name) for a qualified retirement  
plan, to file employment, excise, alco-  
hol, tobacco, or firearms returns, or as a  
payer of gambling winnings. If you do  
not have such an EIN, leave line D  
blank.  
Example. You change to the cash  
method of accounting and choose to ac-  
count for inventoriable items in the same  
manner as non-incidental materials and  
supplies for the 2023 tax year. You ac-  
crued sales in 2022 for which you re-  
ceived payment in 2023. You must re-  
port those sales in both years as a result  
of changing your accounting method  
and must make a section 481(a) adjust-  
ment to prevent duplication of income.  
that an owner would not customarily do  
in the same type of activity and one of  
your main reasons for doing the work  
was to avoid the disallowance of losses  
or credits from the activity under the  
passive activity rules.  
Work you did as an investor in an ac-  
tivity is not treated as participation un-  
less you were directly involved in the  
day-to-day management or operations of  
the activity. Work performed as an in-  
vestor includes:  
Line E  
Enter your business address. Show a  
street address instead of a box number.  
Include the suite or room number, if any.  
If you conducted the business from your  
home located at the address shown on  
page 1 of your tax return, you do not  
have to complete this line.  
A net negative section 481 adjust-  
ment is generally taken into account in  
the year of change. A net positive sec-  
tion 481(a) adjustment is generally taken  
into account over a period of 4 years. In-  
clude any net positive section 481(a) ad-  
justments on line 6. If the net section  
481(a) adjustment is negative, report it  
in Part V.  
Studying and reviewing financial  
statements or reports on the activity,  
Preparing or compiling summaries  
or analyses of the finances or operations  
of the activity for your own use, and  
Line F  
Monitoring the finances or opera-  
tions of the activity in a nonmanagerial  
capacity.  
Generally, you can use the cash method,  
an accrual method, or any other method  
permitted by the Internal Revenue Code.  
In all cases, the method used must clear-  
ly reflect income. Unless you are a small  
business taxpayer (defined later under  
Part III), you must use an accrual meth-  
od for sales and purchases of inventory  
items. Special rules apply to long-term  
contracts (see section 460 for details).  
See also Rev. Proc. 2022-9 for changes  
in accounting periods and methods of  
accounting, available at IRS.gov/irb/  
More information. For more informa-  
tion about changing your accounting  
method and the section 481(a) adjust-  
ment, see the Instructions for Form  
3115. Additional information is also  
available in various revenue procedures.  
See Rev. Proc. 2022-14 (and any subse-  
quent revenue procedures modifying  
Rev. Proc. 2022-14) for a list of auto-  
matic changes, including a description  
of its effect on prior lists of automatic  
changes. Rev. Proc. 2022-14 is available  
Participation by your spouse during  
the tax year in an activity in which you  
own an interest can be counted as your  
participation in the activity. This rule ap-  
plies even if your spouse did not own an  
interest in the activity and whether or  
not you and your spouse file a joint re-  
turn. However, this rule does not apply  
for purposes of determining whether you  
and your spouse can elect to have your  
business treated as a qualified joint ven-  
ture instead of a partnership (see Quali-  
fied Joint Venture, earlier).  
at  
If you use the cash method, show all  
items of taxable income actually or con-  
structively received during the year (in  
cash, property, or services). Income is  
constructively received when it is credi-  
ted to your account or set aside for you  
to use. Also, show amounts actually paid  
during the year for deductible expenses.  
However, if the payment of an expendi-  
ture creates an asset having a useful life  
that extends beyond 12 months or the  
end of the next tax year, it may not be  
deductible or may be deductible only in  
part for the year of the payment. See  
chapter 2 of Pub. 334, Tax Guide for  
Small Business.  
For purposes of the passive activity  
rules, you materially participated in the  
operation of a trade or business activity  
during 2023 if you met any of the fol-  
lowing seven tests.  
Line G  
If your business activity is not a rental  
activity and you meet any of the materi-  
al participation tests, explained next, or  
check the “Yes” box. Otherwise, check  
“No.” If you check “No,” this activity is  
passive. If you have a loss from a pas-  
sive activity, see Limit on losses, later. If  
you have a profit from the rental of  
property to a nonpassive activity, see  
Recharacterization of Passive Income in  
Pub. 925 to find out how to report the  
net income.  
1. You participated in the activity  
for more than 500 hours during the tax  
year.  
2. Your participation in the activity  
for the tax year was substantially all of  
the participation in the activity of all in-  
dividuals (including individuals who did  
not own any interest in the activity) for  
the tax year.  
3. You participated in the activity  
for more than 100 hours during the tax  
year, and you participated at least as  
much as any other person for the tax  
year. This includes individuals who did  
not own any interest in the activity.  
For amounts includible in income and  
deductible as expense under an accrual  
method, see Pub. 538.  
Material participation. For purposes  
of the seven material participation tests  
listed later, participation generally in-  
cludes any work you did in connection  
with an activity, if you owned an interest  
in the activity at the time you did the  
work. The capacity in which you did the  
work does not matter. However, work is  
not treated as participation if it is work  
To change your accounting method,  
you must generally file Form 3115. You  
may also have to make an adjustment to  
prevent amounts of income or expense  
from being duplicated or omitted. This  
is called a section 481(a) adjustment.  
4. The activity is a significant par-  
ticipation activity for the tax year, and  
you participated in all significant partici-  
pation activities for more than 500 hours  
during the year. An activity is a “signifi-  
C-4  
     
cant participation activity” if it involves  
the conduct of a trade or business, you  
participated in the activity for more than  
100 hours during the tax year, and you  
did not materially participate under any  
of the material participation tests (other  
than this test 4).  
“No” box on line G. In addition, your  
rental activity loss may be limited even  
if you materially participated. In gener-  
al, a business activity in which you do  
not materially participate or a rental ac-  
tivity is a passive activity and you have  
to use Form 8582 to apply a limitation  
that may reduce the loss, if any, that you  
may enter on Schedule C, line 31. For  
details, see Pub. 925.  
figure the extraterritorial income exclu-  
sion. Report it on Schedule C as ex-  
plained in the Instructions for Form  
8873.  
If you were a debtor in a chapter 11  
bankruptcy case during 2023, see Chap-  
ter 11 Bankruptcy Cases in the Instruc-  
tions for Form 1040 (under Income) and  
the Instructions for Schedule SE.  
5. You materially participated in the  
activity for any 5 of the prior 10 tax  
years.  
Be sure to report all income attributa-  
ble to your trade or business from all  
sources. You may receive one or more  
Forms 1099 from people who are re-  
quired to provide information to the IRS  
listing amounts that may be income you  
received as a result of your trade or busi-  
ness activities. The following is a list of  
some of the common Forms 1099.  
6. The activity is a personal service  
activity in which you materially partici-  
pated for any 3 prior tax years. A per-  
sonal service activity is an activity that  
involves performing personal services in  
the field of health, law, engineering, ar-  
chitecture, accounting, actuarial science,  
performing arts, or consulting, or any  
other trade or business in which capital  
is not a material income-producing fac-  
tor.  
Note. Line G doesn't apply to filers of  
Form 1040-SS.  
Line H  
If you started or acquired this business  
in 2023, check the box on line H. Also,  
check the box if you are reopening or re-  
starting this business after temporarily  
closing it, and you did not file a 2022  
Schedule C for this business.  
1099-MISC. For more information  
about what is reported on Form  
1099-MISC, see the Instructions for Re-  
cipient included on that form.  
7. Based on all the facts and circum-  
stances, you participated in the activity  
on a regular, continuous, and substantial  
basis for more than 100 hours during the  
tax year. Your participation in managing  
the activity does not count in determin-  
ing if you meet this test if any person  
(except you) (a) received compensation  
for performing management services in  
connection with the activity, or (b) spent  
more hours during the tax year than you  
spent performing management services  
in connection with the activity (regard-  
less of whether the person was compen-  
sated for the services).  
Line I  
1099-NEC. For more information  
If you made any payment in 2023 that  
would require you to file any Forms  
1099, check the “Yes” box. Otherwise,  
check the “No” box.  
about what is reported on Form  
1099-NEC, see the Instructions for Re-  
cipient included on that form.  
1099-K. For more information  
about what is reported on Form 1099-K,  
see the Instructions for Payee included  
on that form and go to IRS.gov/Gig.  
You may have to file information re-  
turns for wages paid to employees, cer-  
tain payments of fees and other nonem-  
ployee compensation, interest, rents,  
royalties, real estate transactions, annui-  
ties, and pensions. You may also have to  
file an information return if you sold  
$5,000 or more of consumer products to  
a person on a buy-sell, a deposit-com-  
mission, or other similar basis for resale.  
Income you report on Sched-  
ule C may be qualified business  
income and entitle you to a de-  
TIP  
duction on Form 1040 or 1040-SR,  
line 13. See Forms 8995 and 8995-A,  
and  
Rental of personal property. General-  
ly, a rental activity (such as long-term  
equipment leasing) is a passive activity  
even if you materially participated in the  
activity. However, if you met any of the  
five exceptions listed under Rental Ac-  
tivities in the Instructions for Form  
8582, the rental of the property is not  
treated as a rental activity and the mate-  
rial participation rules explained earlier  
apply.  
Note. Line I doesn't apply to filers of  
Form 1040-SS.  
Line 1  
The Guide to Information Re-  
Enter gross receipts from your trade or  
business. Be sure to check any Forms  
1099 you received for business income  
that must be reported on this line.  
turns in the 2023 General In-  
structions for Certain Informa-  
TIP  
tion Returns identifies which Forms  
1099 must be filed, the amounts to re-  
port, and the due dates for the required  
Forms 1099.  
If you received one or more Forms  
1099-NEC, be sure line 1 includes  
amounts properly shown on your Forms  
1099-NEC. If the total amounts that  
were reported in box 1 of Forms  
1099-NEC are more than the total you  
are reporting on line 1, attach a state-  
ment explaining the difference.  
Exception for oil and gas. If you are  
filing Schedule C to report income and  
deductions from an oil or gas well in  
which you own a working interest di-  
rectly or through an entity that does not  
limit your liability, check the “Yes” box.  
The activity of owning a working inter-  
est is not a passive activity, regardless of  
your participation.  
Part I. Income  
Except as otherwise provided in the In-  
ternal Revenue Code, gross income in-  
cludes income from whatever source de-  
rived. In certain circumstances, howev-  
er, gross income does not include extra-  
territorial income that is qualifying for-  
eign trade income. Use Form 8873 to  
Statutory employees. If you received a  
Form W-2, Wage and Tax Statement,  
and the "Statutory employee" box in  
box 13 of that form was checked, report  
your income and expenses related to that  
Limit on losses. Your business activity  
loss may be limited if you checked the  
C-5  
     
income on Schedule C. Enter your statu-  
tory employee income from box 1 of  
Form W-2 on line 1 of Schedule C and  
check the box on that line. Social securi-  
ty and Medicare tax should have been  
withheld from your earnings; as a result,  
you do not owe self-employment tax on  
these earnings. Statutory employees in-  
clude full-time life insurance agents,  
certain agent or commission drivers and  
traveling salespersons, and certain  
homeworkers.  
A sales allowance is a reduction in the  
selling price of products, instead of a  
cash or credit refund.  
941 or Form 944 for 2023 for the  
nonrefundable and refundable portions  
of this credit that you claimed against  
your employment taxes.  
Other kinds of miscellaneous  
business income.  
Line 6  
Report on line 6 business income not re-  
ported elsewhere in Part I. Be sure to in-  
clude amounts from the following.  
If the business use percentage of any  
listed property (defined under Line 13,  
later) dropped to 50% or less in 2023,  
report on this line any recapture of ex-  
cess depreciation, including any section  
179 expense deduction. Use Part IV of  
Form 4797 to figure the recapture. Also,  
if the business use percentage drops to  
50% or less on leased listed property  
(other than a vehicle), include on this  
line any inclusion amount. See chapter 5  
of Pub. 946 to figure the amount.  
Finance reserve income.  
Scrap sales.  
Bad debts you recovered.  
Interest (such as on notes and  
If you had both self-employment in-  
come and statutory employee income,  
you must file two Schedules C. You can-  
not combine these amounts on a single  
Schedule C.  
accounts receivable).  
State gasoline or fuel tax refunds  
you received in 2023.  
Any amount of credit for biofuel  
claimed on line 3 of Form 6478.  
Any amount of credit for biodiesel,  
Note. Statutory employees informa-  
tion doesn’t apply to Form 1040-SS fil-  
ers.  
renewable diesel, and sustainable  
aviation fuel claimed on line 11 of Form  
8864.  
Part II. Expenses  
Qualified joint ventures should  
Credit for federal tax paid on fuels  
claimed on your 2022 Form 1040 or  
1040-SR.  
report rental real estate income  
not subject to self-employment  
tax on Schedule E. See Qualified Joint  
Venture, earlier, and the Instructions for  
Schedule E.  
!
Capitalizing costs of producing prop-  
erty and acquiring property for re-  
sale. If you produced real or tangible  
personal property or acquired real or  
personal property for resale, you must  
generally capitalize certain expenses in  
inventory or other property. These ex-  
penses include the direct costs of the  
property and any indirect costs properly  
allocable to that property. Reduce the  
amounts on lines 8 through 26, 27b, and  
Part V by amounts capitalized. See Pub.  
538 for a discussion of the uniform capi-  
talization rules.  
CAUTION  
Prizes and awards related to your  
trade or business.  
Amounts you received in your  
trade or business as shown on Form  
1099-PATR.  
Installment sales. Generally, the in-  
stallment method cannot be used to re-  
port income from the sale of (a) personal  
property regularly sold under the install-  
ment method, or (b) real property held  
for resale to customers. But the install-  
ment method can be used to report in-  
come from sales of certain residential  
lots and timeshares if you elect to pay  
interest on the tax due on that income af-  
ter the year of sale. See section 453(l)(2)  
(B) for details. If you make this election,  
include the interest in the total on  
Schedule 2 (Form 1040), line 14, and  
enter the amount of interest and “453(l)  
(3)” on the line next to the entry space.  
The amount of any payroll tax  
credit taken by an employer for qualified  
paid sick leave and qualified paid family  
leave under the Families First  
Coronavirus Response Act (FFCRA),  
and the American Rescue Plan Act of  
2021 (ARP). See Form 941, lines 11b,  
11d, 13c, and 13e, and Form 944, lines  
8b, 8d, 10d, and 10f. You must include  
the full amount (both the refundable and  
nonrefundable portions) of the credit for  
qualified sick and family leave wages in  
gross income for the tax year that  
includes the last day of any calendar  
quarter with respect to which a credit is  
allowed.  
Exception for a small business tax-  
payer. A small business taxpayer (de-  
fined later under Part III) is not required  
to capitalize certain expenses to invento-  
ry or other property. See Pub. 538 for  
more details.  
Exception for creative property. If  
you are a freelance artist, author, or pho-  
tographer, you may be exempt from the  
capitalization rules. However, your per-  
sonal efforts must have created (or rea-  
sonably be expected to create) the prop-  
erty. This exception does not apply to  
any expense related to printing, photo-  
graphic plates, motion picture films, vid-  
eotapes, or similar items. These expen-  
ses are subject to the capitalization rules.  
For details, see Uniform Capitalization  
Rules in Pub. 538.  
If you use the installment method, at-  
tach a statement to your return. Show  
separately for 2023 and the 3 preceding  
years: gross sales, cost of goods sold,  
gross profit, percentage of gross profit to  
gross sales, amounts collected, and gross  
profit on amounts collected.  
Note. A credit is available only if the  
leave was taken after March 31, 2020,  
and before October 1, 2021, and only af-  
ter the qualified leave wages were paid,  
which might under certain circumstan-  
ces not occur until a quarter after Sep-  
tember 30, 2021, including quarters dur-  
ing 2023. Accordingly, all lines related  
to qualified sick and family leave wages  
remain on the employment tax returns  
for 2023.  
Line 2  
Report your sales returns and allowan-  
ces as a positive number on line 2. A  
sales return is a cash or credit refund  
you gave to customers who returned de-  
fective, damaged, or unwanted products.  
Any amount of credit for COBRA  
premium assistance. See your Form(s)  
C-6  
   
4562 for any other reason (see Line 13,  
later).  
Line 9  
Line 13  
You can deduct the actual expenses of  
operating your car or truck or take the  
standard mileage rate. This is true even  
if you used your vehicle for hire (such as  
a taxicab). You must use actual expenses  
if you used five or more vehicles simul-  
taneously in your business (such as in  
fleet operations). You can’t use actual  
expenses for a leased vehicle if you pre-  
viously used the standard mileage rate  
for that vehicle.  
Depreciation and section 179 expense  
deduction. Depreciation is the annual  
deduction allowed to recover the cost or  
other basis of business or investment  
property having a useful life substantial-  
ly beyond the tax year. You can also de-  
preciate improvements made to leased  
business property. However, stock in  
trade, inventories, and land are not de-  
preciable. Depreciation starts when you  
first use the property in your business or  
for the production of income. It ends  
when you take the property out of serv-  
ice, deduct all your depreciable cost or  
other basis, or no longer use the property  
in your business or for the production of  
income. You can also elect under section  
179 to expense part or all of the cost of  
certain property you bought in 2023 for  
use in your business. See the Instruc-  
tions for Form 4562 and Pub. 946 to fig-  
ure the amount to enter on line 13.  
Line 10  
Enter the total commissions and fees for  
the tax year. Do not include commis-  
sions or fees that are capitalized or de-  
ducted elsewhere on your return.  
You must file Form 1099-NEC to re-  
port certain commissions and fees of  
$600 or more during the year. See the  
Instructions for Forms 1099-MISC and  
1099-NEC for details.  
You can take the standard mileage  
rate for 2023 only if you:  
Sales of property. Generally, commis-  
sions and other fees paid to facilitate the  
sale of property must be capitalized.  
However, if you are a dealer in property,  
enter on line 10 the commissions and  
fees you paid to facilitate the sale of that  
property.  
Owned the vehicle and used the  
standard mileage rate for the first year  
you placed the vehicle in service, or  
Leased the vehicle and are using  
the standard mileage rate for the entire  
lease period.  
Note. A dealer in property is a person  
who regularly sells property in the ordi-  
nary course of their trade or business.  
If you take the standard mileage rate:  
Multiply the number of business  
miles driven by 0.655. For example,  
1,250 business miles driven × 0.655 =  
$818.75.  
For more information on the capitali-  
zation of commissions and fees, see the  
examples under Regulations section  
1.263(a)-1(e).  
When to attach Form 4562. You must  
complete and attach Form 4562 only if  
you are claiming:  
Add to this amount your parking  
fees and tolls; and  
Depreciation on property placed in  
service during 2023;  
Enter the total on line 9. Do not  
Depreciation on listed property  
(defined later), regardless of the date it  
was placed in service; or  
Line 11  
deduct depreciation, rent or lease pay-  
ments, or your actual operating expen-  
ses.  
Enter the total cost of contract labor for  
the tax year. Contract labor includes  
payments to persons you do not treat as  
employees (for example, independent  
contractors) for services performed for  
your trade or business. Do not include  
contract labor deducted elsewhere on  
your return, such as contract labor in-  
cludible on line 17, 21, 26, or 37. Also,  
do not include salaries and wages paid  
to your employees; instead, see Line 26,  
later.  
A section 179 expense deduction.  
If you deduct actual expenses:  
If you acquired depreciable property  
for the first time in 2023, see Pub. 946.  
Include on line 9 the business por-  
tion of expenses for gasoline, oil, re-  
pairs, insurance, license plates, etc.; and  
Listed property. Listed property gener-  
ally includes but is not limited to:  
Show depreciation on line 13 and  
rent or lease payments on line 20a.  
Passenger automobiles weighing  
6,000 pounds or less;  
For details, see chapter 4 of Pub. 463.  
Any other property used for trans-  
portation if the nature of the property  
lends itself to personal use, such as mo-  
torcycles, pickup trucks, etc.; and  
Information on your vehicle. If you  
claim any car and truck expenses, you  
must provide certain information on the  
use of your vehicle by completing one  
of the following.  
You must file Form 1099-NEC to re-  
port contract labor payments of $600 or  
more during the year. See the Instruc-  
tions for Forms 1099-MISC and  
1099-NEC for details.  
Any property used for entertain-  
ment or recreational purposes (such as  
photographic, phonographic, communi-  
cation, and video recording equipment).  
1. Complete Schedule C, Part IV, if  
(a) you are claiming the standard mile-  
age rate, you lease your vehicle, or your  
vehicle is fully depreciated; and (b) you  
are not required to file Form 4562 for  
any other reason. If you used more than  
one vehicle during the year, attach a  
statement with the information requested  
in Schedule C, Part IV, for each addi-  
tional vehicle.  
Exception. Listed property does not  
include photographic, phonographic,  
communication, or video equipment  
used exclusively in your trade or busi-  
ness or at your regular business estab-  
lishment. For purposes of this exception,  
a portion of your home is treated as a  
regular business establishment only if  
that portion meets the requirements un-  
der section 280A(c)(1) for deducting ex-  
Line 12  
Enter your deduction for depletion on  
this line. If you have timber depletion,  
attach Form T (Timber). See chapter 7  
of Pub 225 for additional details.  
Depletion is generally an item  
of tax preference under the Al-  
ternative Minimum Tax (AMT).  
See section 57.  
!
2. Complete Form 4562, Part V, if  
you are claiming depreciation on your  
vehicle or you are required to file Form  
CAUTION  
C-7  
 
penses for the business use of your  
home.  
ing on its type. For example, home  
mortgage interest and investment inter-  
est are treated differently. “Interest allo-  
cation” rules require you to allocate  
(classify) your interest expense so it is  
deducted (or capitalized) on the correct  
line of your return and receives the right  
tax treatment. These rules could affect  
how much interest you are allowed to  
deduct on Schedule C.  
The Tax Cuts and Jobs Act, sec-  
tion 11043, limited the deduc-  
tion for mortgage interest paid  
!
CAUTION  
Recapture. See Line 6, earlier, if the  
business use percentage of any listed  
property dropped to 50% or less in 2023.  
on home equity loans and lines of credit.  
See section 163(h)(3)(F).  
If you and at least one other person  
(other than your spouse if you file a joint  
return) were liable for and paid interest  
on the mortgage and the other person re-  
ceived the Form 1098, include your  
share of the interest on line 16b. Attach  
a statement to your return showing the  
name and address of the person who re-  
ceived the Form 1098. In the margin  
next to line 16b, enter “See attached.”  
Line 14  
Deduct contributions to employee bene-  
fit programs that are not an incidental  
part of a pension or profit-sharing plan  
included on line 19. Examples are acci-  
dent and health plans, group-term life  
insurance, and dependent care assistance  
programs. If you made contributions on  
your behalf as a self-employed person to  
a dependent care assistance program,  
complete Form 2441, Parts I and III, to  
figure your deductible contributions to  
that program.  
Generally, you allocate interest ex-  
pense by tracing how the proceeds of the  
loan were used. See chapter 4 of Pub.  
225, generally, for details.  
Limitation on business interest. You  
must file Form 8990 to deduct any inter-  
est expenses of this trade or business un-  
(defined under Part III) or meet one of  
the other filing exceptions listed in the  
Instructions for Form 8990.  
If you paid interest in 2023 that also  
applies to future years, deduct only the  
part that applies to 2023.  
Line 17  
You cannot deduct contributions you  
made on your behalf as a self-employed  
person for group-term life insurance.  
Include on this line fees charged by ac-  
countants and attorneys that are ordinary  
and necessary expenses directly related  
to operating your business.  
If you must file Form 8990, figure  
the limit on your business interest ex-  
penses on Form 8990 before completing  
lines 16a and 16b. Follow the instruc-  
tions under How to report, later, but re-  
port the reduced interest on lines 16a  
and 16b. The interest you can't deduct  
this year will carry forward to next year  
on Form 8990.  
Do not include on line 14 any contri-  
butions you made on your behalf as a  
self-employed person to an accident and  
health plan. However, you may be able  
to deduct on Schedule 1 (Form 1040),  
line 17, the amount you paid for health  
insurance on behalf of yourself, your  
spouse, and dependents, even if you do  
not itemize your deductions. See the in-  
structions for line 17, Schedule 1, con-  
tained within the Instructions for Form  
1040.  
Include fees for tax advice related to  
your business and for preparation of the  
tax forms related to your business. Also,  
include expenses incurred in resolving  
asserted tax deficiencies related to your  
business.  
If you are a small business taxpayer  
or meet one of the other filing excep-  
tions for Form 8990, follow the instruc-  
tions under How to report, later, and re-  
port all of your deductible interest on  
lines 16a and 16b.  
For more information, see Pub. 334.  
Line 18  
Include on this line your expenses for  
office supplies and postage.  
You must reduce your line 14 deduc-  
tion by the amount of any credit for  
small employer health insurance premi-  
ums determined on Form 8941. See  
Form 8941 and its instructions to deter-  
mine which expenses are eligible for the  
credit.  
How to report. If you have a mortgage  
on real property used in your business,  
enter on line 16a the interest you paid  
for 2023 to banks or other financial in-  
stitutions for which you received a Form  
1098 (or similar statement). If you did  
not receive a Form 1098, enter the inter-  
est on line 16b.  
Line 19  
Enter your deduction for the contribu-  
tions you made for the benefit of your  
employees to a pension, profit-sharing,  
or annuity plan (including SEP, SIM-  
PLE, and SARSEP plans described in  
Pub. 560). If the plan included you as a  
self-employed person, enter the contri-  
butions made as an employer on your  
behalf on Schedule 1 (Form 1040),  
line 16, not on Schedule C.  
Line 15  
If you paid more mortgage interest  
than is shown on Form 1098, include the  
amount on line 16a. Attach a statement  
to your return explaining the difference  
and enter “See attached” in the margin  
next to line 16a. Don’t include mortgage  
interest that must be capitalized, for ex-  
ample, added to basis. See Pub. 551, un-  
der Uniform Capitalization Rules, for  
details.  
Deduct premiums paid for business in-  
surance on line 15. Deduct on line 14  
amounts paid for employee accident and  
health insurance. Do not deduct amounts  
credited to a reserve for self-insurance  
or premiums paid for a policy that pays  
for your lost earnings due to sickness or  
disability. For details, see Pub. 334,  
chapter 8.  
This deduction may be subject to lim-  
itations. For more information on poten-  
tial limitations, see Pub. 560.  
In most cases, you must file the ap-  
plicable form listed below if you main-  
tain a pension, profit-sharing, or other  
funded-deferred compensation plan. The  
filing requirement is not affected by  
Lines 16a and 16b  
Interest allocation rules. The tax treat-  
ment of interest expense differs depend-  
C-8  
 
whether or not the plan qualified under  
the Internal Revenue Code, or whether  
or not you claim a deduction for the cur-  
rent tax year. There is a penalty for fail-  
ure to timely file these forms.  
You can also deduct the cost of  
books, professional instruments, equip-  
ment, etc., if you normally use them  
within a year. However, if their useful-  
ness extends substantially beyond a  
year, you must generally recover their  
costs through depreciation.  
governments. These taxes are not inclu-  
ded in gross receipts or sales nor are  
they a deductible expense. However, if  
the state or local government allowed  
you to retain any part of the sales tax  
you collected, you must include that  
amount as income on line 6.  
Form 5500-EZ. File this form if you  
have a one-participant retirement plan  
Other taxes and license fees not re-  
lated to your business.  
that meets certain requirements.  
A
one-participant plan is a plan that covers  
only you (or you and your spouse).  
Line 23  
Do not reduce your deduction  
You can deduct the following taxes and  
licenses on this line.  
for social security and Medi-  
care taxes by the nonrefundable  
Form 5500-SF. File this form electroni-  
cally with the Department of Labor (at  
efast.dol.gov) if you have a small plan  
(fewer than 100 participants in most ca-  
ses) that meets certain requirements.  
!
CAUTION  
State and local sales taxes imposed  
and refundable portions of the credit for  
sick and family leave wages that you  
claimed on Form 944 or Form(s) 941.  
Instead, you must report your credit for  
qualified sick and family leave wages as  
income on line 6.  
on you as the seller of goods or services.  
If you collected this tax from the buyer,  
you must also include the amount col-  
lected in gross receipts or sales on  
line 1.  
Form 5500. File this form electronical-  
ly with the Department of Labor (at  
efast.dol.gov) for a plan that does not  
meet the requirements for filing Form  
5500-EZ or Form 5500-SF.  
Real estate and personal property  
taxes on business assets.  
Licenses and regulatory fees for  
your trade or business paid each year to  
state or local governments. But some li-  
censes, such as liquor licenses, may  
have to be amortized. See the Instruc-  
tions for Form 4562, Depreciation and  
Amortization, for more information on  
amortization.  
Line 24a  
For details, see Pub. 560.  
Enter your expenses for lodging and  
transportation connected with overnight  
travel for business while away from  
your tax home. In most cases, your tax  
home is your main place of business, re-  
gardless of where you maintain your  
family home. You can’t deduct expenses  
paid or incurred in connection with em-  
ployment away from home if that period  
of employment exceeds 1 year. Also,  
you cannot deduct travel expenses for  
your spouse, your dependent, or any oth-  
er individual unless that person is your  
employee, the travel is for a bona fide  
business purpose, and the expenses  
would otherwise be deductible by that  
person.  
Lines 20a and 20b  
If you rented or leased vehicles, machi-  
nery, or equipment, enter on line 20a the  
business portion of your rental cost. But  
if you leased a vehicle for a term of 30  
days or more, you may have to reduce  
your deduction by the inclusion amount.  
See Leasing a Car in chapter 4 of Pub.  
463 to figure this amount.  
Social security and Medicare taxes  
paid to match required withholding from  
your employees’ wages. Reduce your  
deduction by the amount shown on  
Form 8846, line 4.  
Federal unemployment tax paid.  
Federal highway use tax.  
Contributions to a state unemploy-  
Enter on line 20b amounts paid to  
rent or lease other property, such as of-  
fice space in a building.  
ment insurance fund or disability benefit  
fund if they are considered taxes under  
state law.  
Line 21  
Do not deduct the following.  
Deduct the cost of incidental repairs and  
maintenance that do not add to the prop-  
erty's value or appreciably prolong its  
life. Do not deduct the value of your  
own labor. Do not deduct amounts spent  
to restore or replace property; they must  
be capitalized.  
Do not include expenses for meals on  
this line. Instead, see Line 24b, later. Do  
not include entertainment expenses on  
this line.  
Federal income taxes, including  
your self-employment tax. However,  
you can deduct one-half of your self-em-  
ployment tax on Schedule 1 (Form  
1040), line 15 (but if filing Form  
1040-NR, then only when covered under  
the U.S. social security system due to an  
international social security agreement).  
Instead of keeping records of your  
actual incidental expenses, you can use  
an optional method for deducting inci-  
dental expenses only if you did not pay  
or incur meal expenses on a day you  
were traveling away from your tax  
home. The amount of the deduction is  
$5 a day. Incidental expenses include  
fees and tips given to porters, baggage  
carriers, bellhops, hotel maids, stewards  
or stewardesses and others on ships, and  
hotel servants in foreign countries. They  
do not include expenses for laundry,  
cleaning and pressing of clothing, lodg-  
ing taxes, or the costs of telegrams or  
telephone calls. You cannot use this  
Line 22  
Estate and gift taxes.  
Taxes assessed to pay for improve-  
ments, such as paving and sewers.  
In most cases, you can deduct the cost of  
materials and supplies only to the extent  
you actually consumed and used them in  
your business during the tax year (unless  
you deducted them in a prior tax year).  
However, if you had incidental materials  
and supplies on hand for which you kept  
no inventories or records of use, you can  
deduct the cost of those you actually  
purchased during the tax year, provided  
that method clearly reflects income.  
Taxes on your home or personal  
use property.  
State and local sales taxes on prop-  
erty purchased for use in your business.  
Instead, treat these taxes as part of the  
cost of the property.  
State and local sales taxes imposed  
on the buyer that you were required to  
collect and pay over to state or local  
C-9  
method on any day that you use the  
standard meal allowance (as explained  
under Line 24b, later).  
See Notice 2021-25 for examples and  
more information. Notice 2021-25 is  
incidentals provided to a nonemployee  
to the extent the expenses are includible  
in the gross income of that person and  
reported on Form 1099-NEC. See chap-  
ter 5 of Pub. 15 (Circular E), Employer’s  
Tax Guide, for details and other excep-  
tions. See also chapter 8 of Pub. 334.  
available  
at  
You can’t deduct expenses for attend-  
ing a convention, seminar, or similar  
meeting held outside the North Ameri-  
can area unless the meeting is directly  
related to your trade or business and it is  
as reasonable for the meeting to be held  
outside the North American area as  
within it. These rules apply to both em-  
ployers and employees. Other rules ap-  
ply to luxury water travel.  
Standard meal allowance. Instead of  
deducting the actual cost of your meals  
while traveling away from home, you  
can use the standard meal allowance for  
your daily meals and incidental expen-  
ses. Under this method, you deduct a  
specified amount, depending on where  
you travel, instead of keeping records of  
your actual meal expenses. However,  
you must still keep records to prove the  
time, place, and business purpose of  
your travel.  
Daycare providers. If you qualify as a  
family daycare provider, you can use the  
standard meal and snack rates, instead of  
actual costs, to figure the deductible cost  
of meals and snacks provided to eligible  
children. If you receive reimbursement  
under a food program of the Department  
of Agriculture, only deduct the cost of  
food that exceeds reimbursement, if any.  
See Pub. 587 for details, including re-  
cordkeeping requirements.  
For details on travel expenses, see  
chapter 1 of Pub. 463.  
The standard meal allowance is the  
federal meals and incidental expenses  
(M&IE) rate. You can find these rates  
for locations inside and outside the con-  
tinental United States by going to the  
General Services Administration's web-  
Line 24b  
Enter your deductible business meal ex-  
penses. This includes expenses for meals  
while traveling away from home for  
business. Your deductible business meal  
expenses are a percentage of your actual  
business meal expenses or standard meal  
allowance. See Amount of deduction,  
later, for the percentage that applies to  
your actual meal expenses or standard  
meal allowance. In most cases, the per-  
centage is 50%.  
Line 25  
Deduct utility expenses only for your  
trade or business.  
Local telephone service. If you used  
your home phone for business, do not  
deduct the base rate (including taxes) of  
the first phone line into your residence.  
But you can deduct any additional costs  
you incurred for business that are more  
than the base rate of the first phone line.  
For example, if you had a second line,  
you can deduct the business percentage  
of the charges for that line, including the  
base rate charges.  
See chapter 2 of Pub. 463 for details  
on how to figure your deduction using  
the standard meal allowance, including  
special rules for partial days of travel.  
For special per diem rates and rules of  
high cost locales, see IRS.gov/irb/  
Do not include entertainment expen-  
ses on this line.  
Amount of deduction. For business  
meals, you can deduct 50% of your busi-  
ness meal expenses, including meals in-  
curred while away from home on busi-  
ness. However, for individuals subject to  
the Department of Transportation (DOT)  
hours of service limits, the percentage  
for other business meals is increased to  
80% for business meals consumed dur-  
ing, or incident to, any period of duty for  
which those limits are in effect. Individ-  
uals subject to the DOT hours of service  
limits include the following.  
Business meal expenses. You can de-  
duct a percentage of the actual cost of a  
meal if the following conditions are met.  
Line 26  
The meal expense was an ordinary  
and necessary expense in carrying on  
your trade or business.  
Enter the total salaries and wages for the  
tax year reduced by the amount of the  
following credit(s), if applicable.  
The expense was not lavish or ex-  
travagant under the circumstances.  
Work Opportunity Credit (Form  
5884).  
You or your employee was present  
at the meal.  
Empowerment Zone Employment  
Credit (Form 8844).  
The meal was provided to a cur-  
Credit for Employer Differential  
Wage Payments (Form 8932).  
rent or potential business customer, cli-  
ent, consultant, or similar business con-  
tact.  
Certain air transportation workers  
Employer Credit for Paid Family  
and Medical Leave (Form 8994).  
(such as pilots, crew, dispatchers, me-  
chanics, and control tower operators)  
who are under Federal Aviation Admin-  
istration regulations.  
In the case of food or beverages  
provided during or at an entertainment  
event, the food and beverages were pur-  
chased separately from the entertain-  
ment, or the cost of the food and bever-  
ages was stated separately from the cost  
of the entertainment on one or more  
bills, invoices, or receipts.  
Do not reduce your deduction for any  
portion of a credit that was passed  
through to you from a pass-through enti-  
ty. See the instructions for the credit  
form for more information.  
Interstate truck operators who are  
under DOT regulations.  
Certain merchant mariners who are  
under Coast Guard regulations.  
Do not include salaries and wages de-  
ducted elsewhere on your return or  
amounts paid to yourself.  
However, you can fully deduct meals  
and incidentals furnished or reimbursed  
to an employee if you properly treat the  
expense as wages subject to withhold-  
ing. You can also fully deduct meals and  
You cannot avoid the entertain-  
ment disallowance rule by in-  
flating the amount charged for  
food and beverages.  
!
CAUTION  
C-10  
       
If you provided taxable fringe  
benefits to your employees,  
such as personal use of a car,  
ularly for daycare, or regularly for stor-  
age of inventory or product samples, by  
$5. The area you use to figure your de-  
duction cannot exceed 300 square feet.  
You cannot use the simplified method to  
figure a deduction for rental use of your  
home.  
tion for any additional home. If one or  
more of the homes were not used for the  
entire year (for example, you moved  
during the year), see Part-year use or  
ly), later, and Columns (a) and (b) in the  
Instructions for Form 8829.  
!
CAUTION  
do not deduct as wages the amount ap-  
plicable to depreciation and other ex-  
penses claimed elsewhere.  
In most cases, you are required to file  
Form W-2 for each employee. See the  
General Instructions for Forms W-2 and  
W-3.  
Electing to use the simplified meth-  
od. You choose whether or not to use  
the simplified method each tax year.  
Make the election by using the simpli-  
fied method to figure the deduction for  
the qualified business use of a home on  
a timely filed, original federal income  
tax return for that year. An election for a  
year, once made, is irrevocable. A  
change from using the simplified meth-  
od in one year to actual expenses in a  
succeeding year, or vice versa, is not a  
change in method of accounting and  
does not require the consent of the Com-  
missioner.  
Other requirements must still be  
met. You must still meet all the use re-  
quirements to claim a deduction for  
business use of the home. The simplified  
method is only an alternative to the cal-  
culation, allocation, and substantiation  
of actual expenses. The simplified meth-  
od is not an alternative to the exclusivity  
and other tests that must be met in order  
to qualify for this deduction. For more  
information about qualifying business  
uses, see Qualifying for a Deduction in  
Pub. 587.  
Line 27b  
Energy efficient commercial buildings  
deduction. You may be able to deduct  
part or all of the expenses of modifying  
an existing commercial building to make  
it energy efficient. For details, see Form  
7205 and its instructions. Attach Form  
7205 to your tax return.  
Gross  
income  
limitation. The  
amount of your deduction is still limited  
to the gross income derived from quali-  
fied business use of the home reduced  
by the business deductions that are not  
related to your use of the home. If this  
limitation reduces the amount of your  
deduction, you cannot carry over the dif-  
ference to another tax year.  
Line 30  
If you share your home with someone  
else who uses the home for a separate  
business that qualifies for this deduction,  
each of you may make your own elec-  
tion, but not for the same portion of the  
home.  
Business use of your home. You may  
be able to deduct certain expenses for  
business use of your home, subject to  
limitations. To claim a deduction for  
business use of your home, use Form  
8829, or you can elect to determine the  
amount of the deduction using a simpli-  
fied method.  
If you conduct more than one busi-  
ness that qualifies for this deduction in  
your home, your election to use the sim-  
plified method applies to all your quali-  
fied business uses of your home. You are  
limited to a maximum of 300 square feet  
for all of the businesses you conduct in  
your home that qualify for this deduc-  
tion. Allocate the actual square footage  
used (up to the maximum 300 square  
feet) among your qualified business uses  
in any reasonable manner you choose,  
but you may not allocate more square  
feet to a qualified business use than you  
actually use in that business.  
Carryover of actual expenses from  
Form 8829. If you used Form 8829 in a  
prior year, and you had actual expenses  
that you could carry over to the next  
year, you cannot claim those expenses if  
you are using the simplified method. In-  
stead, the actual expenses from Form  
8829 that were not allowed will be car-  
ried over to the next year that you use  
actual expenses to figure your deduc-  
tion.  
If you have a business use of another  
home, you can’t use the simplified meth-  
od for that home. You can use the Form  
8829 to claim expenses for business use  
of the other home.  
For additional information about  
claiming this deduction, see Pub. 587.  
Note. Line 30 doesn't apply to filers of  
Form 1040-SS.  
Depreciation of home. You cannot  
deduct any depreciation (including any  
additional first-year depreciation) or sec-  
tion 179 expense for the portion of your  
home that is used in a qualified business  
use if you figure the deduction for the  
business use of your home using the  
simplified method. The depreciation de-  
duction allowable for that portion of the  
home for that year is deemed to be zero.  
If you are not using the simpli-  
fied method to determine the  
amount of expenses you may  
TIP  
If you used your home for more  
deduct for business use of a home, do  
not complete the additional entry spaces  
on line 30 for total square footage of  
your home and of the part of the home  
used for business. Instead, include the  
amount from line 36 of your Form 8829  
on line 30.  
than one business, you will  
need to file a separate Sched-  
ule C for each business. Do not combine  
your deductions for each business use  
on a single Schedule C.  
!
CAUTION  
Business use of more than one  
home. You may have used more than  
one home in your business. If you used  
more than one home for the same busi-  
ness during 2023, you may elect to use  
the simplified method for only one  
home; you must file a Form 8829 to  
claim a business use of the home deduc-  
Simplified method. The simplified  
method is an alternative to the calcula-  
tion, allocation, and substantiation of ac-  
tual expenses. In most cases, you will  
figure your deduction by multiplying the  
area (measured in square feet) used reg-  
ularly and exclusively for business, reg-  
C-11  
Keep for Your Records  
Simplified Method Worksheet  
1. Enter the amount of the gross income limitation. See the Instructions for the Simplified Method Worksheet (below) . . . . . . . 1.  
2. Allowable square footage for the qualified business use. Do not enter more than 300 square feet. See the Instructions for the  
2.  
Simplified Method Worksheet . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  
3. Simplified method amount  
a. Maximum allowable amount . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3a.  
$5  
b. For daycare facilities not used exclusively for business, see the instructions for line 3b of this worksheet and enter the  
decimal amount from the Daycare Facility Worksheet; otherwise, enter 1.0 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3b.  
c. Multiply line 3a by line 3b and enter the result to 2 decimal places . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3c.  
4. Multiply line 2 by line 3c . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.  
5. Allowable expenses using the simplified method. Enter the smaller of line 1 or line 4 here and include that amount on  
Schedule C, line 30. If zero or less, enter -0- . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5.  
6. Carryover of unallowed expenses from a prior year that are not allowed in 2023.  
a. Operating expenses. Enter the amount from your last Form 8829, line 43 (line 42 if before 2018). See the Instructions for  
the Simplified Method Worksheet . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6a.  
b. Excess casualty losses and depreciation. Enter the amount from your last Form 8829, line 44 (line 43 if before 2018). See  
the Instructions for the Simplified Method Worksheet . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6b.  
Instructions for the Simplified Method Worksheet  
Use this worksheet to figure the amount of expenses you may deduct for a qualified business use of a home if you are electing to use the simplified method for  
that home. If you are not electing to use the simplified method, use Form 8829.  
Line 1. If all gross income from your trade or business is from this qualified business use of your home, figure your gross income limitation as follows.  
A. Enter the amount from Schedule C, line 29 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  
B. Enter any gain derived from the business use of your home and shown on Form 8949 (and included on Schedule D) or Form  
4797 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  
C. Add lines A and B . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  
D. Enter the total amount of any losses (as a positive number) shown on Form 8949 (and included on Schedule D) or Form 4797 that are  
allocable to the business, but not allocable to the business use of the home . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  
E. Gross income limitation. Subtract line D from line C. Enter the result here and on line 1 of the simplified method worksheet . . . . . . .  
If some of the income is from a place of business other than your home, you must first determine the part of your gross income (Schedule C, line 7, and gains  
from Form 8949, Schedule D, and Form 4797) from the business use of your home. In making this determination, consider the amount of time you spent at each  
location as well as other facts. After determining the part of your gross income from the business use of your home, subtract from that amount the total expenses  
shown on Schedule C, line 28, plus any losses shown on Form 8949 (and included on Schedule D) or Form 4797 that are allocable to the business in which you  
use your home but that are not allocable to the business use of the home. Enter the result on line 1 of the simplified method worksheet.  
Note: If you had more than one home in which you conducted this business during the year, include only the income earned and the deductions attributable to  
that income during the period you owned the home for which you elected to use the simplified method.  
Line 2. If you used the same area for the entire year, enter the smaller of the square feet you actually used or 300. If you and your spouse conducted the business  
as a qualified joint venture, split the square feet between you and your spouse in the same manner you split your other tax attributes. If you shared space with  
someone else, used the home for business for only part of the year, or the area you used changed during the year, see Figuring your allowable expenses for  
business use of the home, before entering an amount on this line. Do not enter more than 300 square feet or, if applicable, the average monthly allowable square  
footage on this line. See Part-year use or area changes (for simplified method only), later, for more information on how to figure your average monthly  
allowable square footage.  
Line 3b. If your qualified business use is providing daycare, you may need to account for the time that you used the same part of your home for other purposes.  
If you used the part of your home exclusively and regularly for providing daycare, enter 1.0 on line 3b. If you did not use the part of your home exclusively for  
providing daycare, complete the Daycare Facility Worksheet to figure what number to enter on line 3b.  
Line 6. Because you are using the simplified method this year, you cannot deduct the amounts you entered on lines 6a and 6b this year. If you file Form 8829 in  
a later year for your qualified business use of this home, you will be able to include these expenses when you figure your deduction.  
6a. If you did not file a 2022 Form 8829, then your carryover of prior year operating expenses is the amount of operating expenses shown  
in Part IV of the last Form 8829, if any, that you filed to claim a deduction for business use of the home.  
6b. If you did not file a 2022 Form 8829, then your carryover of prior year excess casualty losses and depreciation is the amount of excess  
casualty losses and depreciation shown in Part IV of the last Form 8829, if any, that you filed to claim a deduction for business use of  
the home.  
C-12  
 
Keep for Your Records  
Daycare Facility Worksheet (for simplified method)  
1. Multiply days used for daycare during the year by hours used per day . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.  
2. Total hours available for use during the year. See the Instructions for the Daycare Facility Worksheet . . . . . . . . . . . . . . . 2.  
3. Divide line 1 by line 2. Enter the result as a decimal amount here and on line 3b of the Simplified Method  
Worksheet . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.  
Instructions for the Daycare Facility Worksheet  
Use this worksheet to figure the percentage to use on line 3b of the Simplified Method Worksheet. If you do not use the area of your home exclusively for daycare, you  
must reduce the prescribed rate before figuring your deduction using the simplified method.  
If you used at least 300 square feet for daycare regularly and exclusively during the year, then you do not need to complete this worksheet. This worksheet is  
only needed if you did not use the allowable area exclusively for daycare.  
TIP  
Line 1. Enter the total number of hours the facility was used for daycare during the year.  
Example. Your home is used Monday through Friday for 12 hours per day for 250 days during the year. It is also used on 50 Saturdays for 8 hours a day. Enter 3,400 hours  
on line 4 (3,000 hours for weekdays plus 400 hours for Saturdays).  
Line 2. If you used your home for daycare during the entire year, multiply 365 days (366 for a leap year) by 24 hours, and enter the result.  
If you started or stopped using your home for daycare during the year, you must prorate the number of hours based on the number of days the home was available for  
daycare. Multiply 24 hours by the number of days available and enter that result.  
Although you cannot deduct  
any depreciation or section 179  
expense for the portion of your  
Shared use (for simplified method  
only). If you share your home with  
someone else who uses the home for a  
separate business that also qualifies for  
this deduction, you may not include the  
same square feet to figure your deduc-  
tion as the other person. You must allo-  
cate the shared space between you and  
the other person in a reasonable manner.  
ble square footage. You figure the aver-  
age monthly allowable square footage  
by adding the amount of allowable  
square feet you used in each month and  
dividing the sum by 12.  
TIP  
home that is a qualified business use be-  
cause you elect to use the simplified  
method, you may still claim depreciation  
or the section 179 expense deduction on  
other assets (for example, furniture and  
equipment) used in the qualified busi-  
ness use of your home.  
When determining the average  
monthly allowable square footage, you  
cannot take more than 300 square feet  
into account for any one month. Addi-  
tionally, if your qualified business use  
was less than 15 days in a month, use -0-  
for that month.  
Example. Taylor and Logan are  
roommates. Taylor uses 300 square feet  
of their home for a qualified business  
use. Logan uses 200 square feet of their  
home for a separate qualified business  
use. The qualified business uses share  
100 square feet. In addition to the por-  
tion that they do not share, Taylor and  
Logan can both claim 50 of the 100  
square feet or divide the 100 square feet  
between them in any reasonable manner.  
If divided evenly, Taylor could claim  
250 square feet using the simplified  
method and Logan could claim 150  
square feet.  
Figuring your allowable expenses for  
business use of the home. You will fig-  
ure the deduction using Form 8829 or  
the Simplified Method Worksheet, or  
both.  
Example 1. Finley files a federal in-  
come tax return on a calendar year basis.  
On July 20, Finley began using 400  
square feet of the home for a qualified  
business use. Finley continued to use the  
400 square feet until the end of the year.  
Finley's average monthly allowable  
square footage is 125 square feet (300  
square feet for August through Decem-  
ber divided by the number of months in  
the year ((300 + 300 + 300 + 300 +  
300)/12)).  
You may not use the simplified  
method and also file Form  
8829 for the same qualified  
!
CAUTION  
business use of the same home.  
Using Form 8829. Use Form 8829  
to figure and claim this deduction for a  
home if you are not or cannot use the  
simplified method for that home. For in-  
formation about claiming this deduction  
using Form 8829, see the Instructions  
for Form 8829 and Pub. 587.  
Part-year use or area changes (for  
simplified method only). If your quali-  
fied business use was for a portion of the  
tax year (for example, a seasonal busi-  
ness, a business that begins during the  
year, or you moved during the year) or  
you changed the square footage of your  
qualified business use, your deduction is  
limited to the average monthly allowa-  
Example 2. Riley files a federal in-  
come tax return on a calendar year basis.  
On April 20, Riley began using 100  
square feet of the home for a qualified  
business use. On August 5, Riley expan-  
ded the area of qualified business use to  
350 square feet. Riley continued to use  
the 350 square feet until the end of the  
year. Riley's average monthly allowable  
Using the simplified method. Use  
these instructions to figure your deduc-  
tion for a qualified business use of your  
home if you are electing to use the sim-  
plified method for that home.  
C-13  
     
square footage is 150 square feet (100  
square feet for May through July and  
300 square feet for August through De-  
cember divided by the number of  
months in the year ((100 + 100 +100 +  
300 + 300 + 300 + 300 + 300)/12)).  
not use your home for business. You  
cannot deduct any excess mortgage in-  
terest, excess real estate taxes, or excess  
casualty losses on Schedule C for this  
home.  
If you checked the "No" box on line  
G, see the Instructions for Form 8582;  
you may need to include information  
from this schedule on Form 8582, even  
if you have a net profit.  
Use Part II of Schedule C to deduct  
business expenses that are unrelated to  
the qualified business use of the home  
(for example, expenses for advertising,  
wages, or supplies, or depreciation of  
equipment or furniture).  
Rental real estate activity. Unless  
you are a qualifying real estate profes-  
sional, a rental real estate activity is a  
passive activity, even if you materially  
participated in the activity. If you have a  
loss, you may need to file Form 8582 to  
apply a limitation that may reduce your  
loss. See the Instructions for Form 8582.  
Example 3. Carter files a federal in-  
come tax return on a calendar year basis.  
From January 1 through July 16, Carter  
used 300 square feet of the home for a  
qualified business use. On July 17, Car-  
ter moved to a new home and immedi-  
ately began using 200 square feet of the  
new home for the same qualified busi-  
ness use. Using the simplified method to  
deduct expenses for the qualified busi-  
ness use for the previous home, Carter’s  
average monthly allowable square foot-  
age is 175 square feet (300 square feet  
for January through July divided by the  
number of months in the year ((300 +  
300 + 300 + 300 + 300 + 300 + 300)/  
12)). Carter also prepared Form 8829 to  
deduct the actual expenses associated  
with the qualified business use of the  
new home.  
Deduction figured on multiple  
forms. If you used more than one home  
for a business during the year, use a  
Form 8829 for each home or use the  
simplified method for one home and  
Form 8829 for any other home. Com-  
bine the amount you figured using the  
simplified method and the amounts you  
figured on your Forms 8829, and then  
enter the total on line 30 of the Sched-  
ule C for that business.  
Reporting your net profit or loss.  
Once you have figured your net profit or  
loss, report it as follows.  
If you enter a loss on line 31,  
you may have an excess busi-  
ness loss. Use Form 461 to fig-  
ure your excess business loss.  
!
CAUTION  
Individuals. Enter your net profit or  
loss on line 31 and include it on Sched-  
ule 1 (Form 1040), line 3. Also, include  
your net profit or loss on Schedule SE,  
line 2. However, if you are a statutory  
employee or notary public, see Statutory  
Line 31  
Figuring your net profit or loss. If  
your expenses (including the expenses  
you report on line 30) are more than  
your gross income, don’t enter your loss  
on line 31 until you have applied the  
at-risk rules and the passive activity loss  
rules. To apply these rules, follow the in-  
structions under Line 32, later, and the  
Instructions for Form 8582. After apply-  
ing those rules, the amount on line 31  
will be your loss, and it may be smaller  
than the amount you figured by subtract-  
ing line 30 from line 29.  
Once you have determined your al-  
lowable square footage, enter the result  
on line 2 of the Simplified Method  
Worksheet.  
Nonresident aliens. Enter your net  
profit or loss on line 31 and include it on  
Schedule 1 (Form 1040), line 3. You  
should also include this amount on  
Schedule SE, line 2, if you are covered  
under the U.S. social security system  
due to an international social security  
agreement currently in effect. See the In-  
structions for Schedule SE for informa-  
tion on international social security  
agreements. However, if you are a statu-  
tory employee or notary public, see Stat-  
If you moved during the year,  
your average allowable square  
footage will generally be less  
than 300.  
!
CAUTION  
You can use the Area Adjust-  
ment Worksheet in Pub. 587 to  
help you determine the allowa-  
TIP  
If your gross income is more than  
your expenses (including the expenses  
you report on line 30), and you don’t  
have prior year unallowed passive activ-  
ity losses, subtract line 30 from line 29.  
The result is your net profit.  
ble square footage to enter on line 2 of  
the Simplified Method Worksheet.  
Reporting your expenses for business  
use of the home. If you did not use the  
simplified method, include the amount  
from line 36 of Form 8829 on line 30 of  
the Schedule C you are filing for that  
business.  
Trusts and estates. Enter the net  
profit or loss on line 31 and include it on  
Form 1041, line 3.  
If your gross income is more than  
your expenses (including the expenses  
you report on line 30), and you have pri-  
or year unallowed passive activity los-  
ses, don’t enter your net profit on line 31  
until you have figured the amount of pri-  
or year unallowed passive activity losses  
you may claim this year for this activity.  
Use Form 8582 to figure the amount of  
prior year unallowed passive activity  
losses you may include on line 31. Be  
sure to indicate that you are including  
prior year passive activity losses by en-  
tering "PAL" to the left of the entry  
space.  
Statutory employees. Enter your net  
profit or loss on line 31 and include it on  
Schedule 1 (Form 1040), line 3. Howev-  
er, do not report this amount on Sched-  
ule SE, line 2. If you were a statutory  
employee and you are required to file  
Schedule SE because of other self-em-  
ployment income, see the Instructions  
for Schedule SE.  
If you used the simplified method. If  
you elect to use the simplified method  
for the business use of a home, complete  
the additional entry spaces on line 30 for  
that home only. Include the amount from  
line 5 of the Simplified Method Work-  
sheet on line 30.  
If you itemize your deductions on  
Schedule A, you may deduct your mort-  
gage interest, real estate taxes, and casu-  
alty losses on Schedule A as if you did  
Notary public. Do not enter your net  
profit from line 31 on Schedule SE,  
line 2, unless you are required to file  
C-14  
     
Schedule SE because you have other  
self-employment income. See the In-  
structions for Schedule SE.  
Cash, property, or borrowed  
on line 31. See the Instructions for Form  
8582 for details.  
amounts used in the business (or con-  
tributed to the business, or used to ac-  
quire the business) that are protected  
against loss by a guarantee, stop-loss  
agreement, or other similar arrangement  
(excluding casualty insurance and insur-  
ance against tort liability).  
If you checked box 32b because  
You can deduct one-half of your  
some investment is not at risk  
and you do not attach Form  
6198, the processing of your return may  
be delayed.  
!
CAUTION  
self-employment tax on Sched-  
ule 1 (Form 1040), line 15. See  
TIP  
the Instructions for Schedule SE for de-  
tails.  
Amounts borrowed for use in the  
At-risk loss deduction. Any loss from  
this business not allowed for 2023 only  
because of the at-risk rules is treated as a  
deduction allocable to the business in  
2024.  
business from a person who has an inter-  
est in the business, other than as a cred-  
itor, or who is related under section  
465(b)(3)(C) to a person (other than  
you) having such an interest.  
Community income. If you and your  
spouse had community income and are  
filing separate returns, see the Instruc-  
tions for Schedule SE before figuring  
self-employment tax.  
More information. For details, see the  
Instructions for Form 6198 and Pub.  
925.  
Figuring your loss. Before determining  
your loss, check box 32a or 32b to indi-  
cate whether the loss from your business  
activity is limited by the at-risk rules.  
Follow the instructions, next, that apply  
to your box 32 activity.  
Earned income credit (EIC). If you  
have a net profit on line 31, this amount  
is earned income and may qualify you  
for the EIC.  
To figure your EIC, use the in-  
Part III. Cost of  
Goods Sold  
In most cases, if you engaged in a trade  
or business in which the production, pur-  
chase, or sale of merchandise was an in-  
come-producing factor, you must take  
inventories into account at the beginning  
and end of your tax year.  
structions for Form 1040,  
line 27. Complete all applica-  
ble steps plus Worksheet B. If you are re-  
quired to file Schedule SE, remember to  
enter one-half of your self-employment  
tax in Part 1, line 1d, of Worksheet B.  
!
CAUTION  
Note. Line 32 doesn't apply to filers of  
Form 1040-SS.  
All investment is at risk. If all  
amounts are at risk in this business,  
check box 32a. If you answered “Yes”  
on line G, your loss will not be reduced  
by the at-risk rules or the passive activi-  
ty loss rules. See Line 31, earlier, for  
how to report your loss.  
Line 32  
Exception for small business taxpay-  
ers. If you are a small business taxpay-  
er, you can choose not to keep an inven-  
tory, but you must still use a method of  
accounting for inventory that clearly re-  
flects income. If you choose not to keep  
an inventory, you won't be treated as  
failing to clearly reflect income if your  
method of accounting for inventory  
treats inventory as non-incidental mate-  
rial or supplies, or conforms to your fi-  
nancial accounting treatment of invento-  
ries. If, however, you choose to keep an  
inventory, you must generally value the  
inventory each year to determine your  
cost of goods sold in Part III of Sched-  
ule C.  
You do not need to complete  
line 32 if line 7 is more than the  
total of lines 28 and 30.  
TIP  
If you answered “No” on line G, you  
may need to complete Form 8582 to fig-  
ure your loss to enter on line 31. See the  
Instructions for Form 8582 for details.  
At-risk rules. In most cases, if you  
have a business loss and amounts inves-  
ted in the business for which you are not  
at risk, complete Form 6198 to apply a  
limitation that may reduce your loss.  
The at-risk rules generally limit the  
amount of loss (including loss on the  
disposition of assets) you can claim to  
the amount you could actually lose in  
the business.  
Some investment is not at risk. If  
some investment is not at risk, check  
box 32b; the at-risk rules apply to your  
loss. Be sure to attach Form 6198 to  
your return.  
If you answered "Yes" on line G,  
complete Form 6198 to figure the loss to  
enter on line 31. The passive activity  
loss rules do not apply. See Line 31, ear-  
lier, for how to report your loss.  
Check box 32b if you have amounts  
invested in this business for which you  
are not at risk, such as the following.  
If you answered "No" on line G, the  
passive activity loss rules may apply.  
First, complete Form 6198 to figure the  
amount of your profit or (loss) for the  
at-risk activity, which may include  
amounts reported on other forms and  
schedules, and the at-risk amount for the  
activity. Follow the Instructions for  
Form 6198 to determine how much of  
your Schedule C loss will be allowed.  
After you figure the amount of your loss  
that is allowed under the at-risk rules,  
you may need to complete Form 8582 to  
figure the passive activity loss to enter  
Small business taxpayer. You quali-  
fy as a small business taxpayer if you (a)  
have average annual gross receipts of  
$29 million or less for the 3 prior tax  
years, and (b) are not a tax shelter (as  
defined in section 448(d)(3)).  
Nonrecourse loans used to finance  
the business, to acquire property used in  
the business, or to acquire the business  
that are not secured by your own proper-  
ty (other than property used in the busi-  
ness), and for which you are not person-  
ally responsible to repay. However, there  
is an exception for certain nonrecourse  
financing borrowed by you in connec-  
tion with holding real property. See the  
Instructions for Form 6198 and Pub.  
925.  
If your business has not been in exis-  
tence for all of the 3-tax-year period  
used in figuring average gross receipts,  
base your average on the period it has  
existed, and if your business has a pred-  
ecessor entity, include the gross receipts  
of the predecessor entity from the  
3-tax-year period when figuring average  
C-15  
   
gross receipts. If your business (or pred-  
ecessor entity) had short tax years for  
any of the 3-tax-year period, annualize  
your business' gross receipts for the  
short tax years that are part of the  
3-tax-year period.  
new method of accounting and enter the  
result on line 35. If there is a difference  
between last year's closing inventory  
and the refigured amount, attach an ex-  
planation and take it into account when  
figuring your section 481(a) adjustment.  
For details, see the example under Line  
F, earlier.  
Part V. Other  
Expenses. Line 48  
Include all ordinary and necessary busi-  
ness expenses not deducted elsewhere  
on Schedule C. List the type and amount  
of each expense separately in the space  
provided. Enter the total on lines 48 and  
27a. Do not include the cost of business  
equipment or furniture; replacements or  
permanent improvements to property; or  
personal, living, and family expenses.  
Do not include charitable contributions.  
Also, you cannot deduct fines or penal-  
ties paid to a government for violating  
any law. For details on business expen-  
ses, see Pub. 334, chapter 8.  
See Pub. 538 for more information.  
Treating inventory as non-incidental  
material or supplies. If you account for  
inventories as materials and supplies  
that are not incidental, you deduct the  
amounts paid to acquire or produce the  
inventoriable items (treated as materials  
and supplies) in the year in which they  
are first used or consumed in your oper-  
ations.  
Part IV. Information  
on Your Vehicle  
Line 44b  
In most cases, commuting is travel be-  
tween your home and a work location. If  
you converted your vehicle during the  
year from personal to business use (or  
vice versa), enter your commuting miles  
only for the period you drove your vehi-  
cle for business.  
Financial accounting treatment of  
inventories. Your financial accounting  
treatment of inventories is determined  
with regard to the method of accounting  
you use in your applicable financial  
statement (as defined in section 451(b)  
(3)) or, if you do not have an applicable  
financial statement, with regard to the  
method of accounting you use in your  
books and records that have been pre-  
pared in accordance with your account-  
ing procedures.  
Amortization. Include amortization in  
this part. For amortization that begins in  
2023, complete and attach Form 4562.  
You can amortize such costs as:  
The cost of pollution-control fa-  
cilities;  
Travel that meets any of the follow-  
ing conditions isn't commuting; it is  
considered deductible business travel.  
Amounts paid for research and ex-  
perimentation;  
You have at least one regular work  
Amounts paid to acquire, protect,  
expand, register, or defend trademarks  
or trade names; or  
location away from your home and the  
travel is to a temporary work location in  
the same trade or business, regardless of  
the distance. Generally, a temporary  
work location is one where your  
More information. For more infor-  
mation about this exception for small  
businesses using this method of account-  
ing for inventoriable items, see Pub.  
538.  
Goodwill and certain other intangi-  
bles.  
In most cases, you cannot amortize  
real property construction period interest  
and taxes. Special rules apply for allo-  
cating interest to real or personal proper-  
ty produced in your trade or business.  
employment is expected to last 1 year or  
less. See Pub. 463 for more details.  
The travel is to a temporary work  
location outside the metropolitan area  
where you live and normally work.  
Changing your method of account-  
ing for inventory. If you want to  
change your method of accounting for  
inventory, file Form 3115. For details,  
see Line F, earlier.  
Your home is your principal place  
For a complete list, see the instruc-  
tions for Form 4562, Part VI.  
of business under section 280A(c)(1)(A)  
(for purposes of deducting expenses for  
business use of your home) and the  
travel is to another work location in the  
same trade or business, regardless of  
whether that location is regular or  
At-risk loss deduction. Any loss from  
this business that was not allowed last  
year because of the at-risk rules is trea-  
ted as a deduction allocable to this busi-  
ness in 2023.  
Certain direct and indirect ex-  
penses may have to be capital-  
ized or included in inventory.  
See Part II, earlier. See Pub. 538 for ad-  
!
CAUTION  
temporary and regardless of distance.  
ditional information.  
Bad debts. Include debts and partial  
debts from sales or services that were in-  
cluded in income and are definitely  
known to be worthless. If you later col-  
lect a debt that you deducted as a bad  
debt, include it as income in the year  
collected. For details, see Pub. 334,  
chapter 8.  
Line 47  
Line 33  
Specific recordkeeping rules apply to  
car or truck expenses. For more infor-  
mation about what records you must  
keep, see Pub. 463.  
Your inventories can be valued at cost,  
the lower of cost or market, or any other  
method approved by the IRS.  
You may maintain written evidence  
by using an electronic storage system  
that meets certain requirements. For  
more information about electronic stor-  
age systems, see Pub. 583.  
Line 33 doesn't apply to filers of  
Form 1040-SS.  
Business startup costs. If your busi-  
ness began in 2023, you can elect to de-  
duct up to $5,000 of certain business  
startup costs. The $5,000 limit is re-  
duced (but not below zero) by the  
amount by which your total startup costs  
exceed $50,000. Your remaining startup  
Line 35  
If you are changing your method of ac-  
counting beginning with 2023, refigure  
last year's closing inventory using your  
C-16  
costs can be amortized over  
180-month period, beginning with the  
month the business began.  
a
paid for tangible property up to $2,500  
per item or invoice.  
figure and collect the right amount of  
tax.  
Only deduct these amounts as other  
expenses. Don't include these amounts  
on any other line.  
You are not required to provide the  
information requested on a form that is  
subject to the Paperwork Reduction Act  
unless the form displays a valid OMB  
control number. Books or records relat-  
ing to a form or its instructions must be  
retained as long as their contents may  
become material in the administration of  
any Internal Revenue law. Generally, tax  
returns and return information are confi-  
dential, as required by section 6103.  
For details, see IRS.gov/Newsroom/  
For amortization that begins in 2023,  
complete and attach Form 4562.  
For details on making this election  
and requirements for using the de mini-  
mis safe harbor for tangible property,  
see chapter 8 of Pub. 334.  
Deduction for removing barriers to  
individuals with disabilities and the  
elderly. You may be able to deduct up  
to $15,000 of costs paid or incurred in  
2023 to remove architectural or trans-  
portation barriers to individuals with  
disabilities and the elderly. However,  
you cannot take both a credit (on Form  
8826) and a deduction for the same ex-  
penditures.  
Film and television and live theatrical  
production expenses. You can elect to  
deduct costs of certain qualified film and  
television productions or qualified live  
theatrical productions. See section 181,  
for details.  
The time needed to complete and file  
Schedule C (Form 1040) will vary de-  
pending on individual circumstances.  
The estimated burden for individual tax-  
payers filing this form is included in the  
estimates shown in the instructions for  
their individual income tax return. The  
estimated burden for all other taxpayers  
who file this form is approved under  
OMB control number 1545-1974 and is  
shown next.  
Forestation and reforestation costs.  
Reforestation costs are generally capital  
expenditures. However, for each quali-  
fied timber property, you can elect to ex-  
pense up to $10,000 ($5,000 if married  
filing separately) of qualifying reforesta-  
tion costs paid or incurred in 2023.  
De minimis safe harbor for tangible  
property. Generally, you must capital-  
ize costs to acquire or produce real or  
tangible personal property used in your  
trade or business, such as buildings,  
equipment, or furniture. However, if you  
elect to use the de minimis safe harbor  
for tangible property, you may deduct de  
minimis amounts paid to acquire or pro-  
duce certain tangible property if these  
amounts are deducted by you for finan-  
cial accounting purposes or in keeping  
your books and records.  
You can elect to amortize the remain-  
ing costs over 84 months. For amortiza-  
tion that begins in 2023, complete and  
attach Form 4562.  
Recordkeeping  
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3 hr., 36 min.  
Learning about the law or the  
form  
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1 hr., 19 min.  
1 hr., 39 min.  
The amortization election and the ex-  
pense election don’t apply to trusts. For  
details on reforestation expenses, see  
chapter 4 of Pub. 225.  
Preparing the form  
Copying, assembling, and sending  
the form to the IRS  
.
.
.
.
.
.
34 min.  
If you have an applicable financial  
statement, you may use this safe harbor  
to deduct amounts paid for tangible  
property up to $5,000 per item or in-  
voice. If you don't have an applicable fi-  
nancial statement, you may use the de  
minimis safe harbor to deduct amounts  
Paperwork Reduction Act Notice. We  
ask for the information on Schedule C  
(Form 1040) to carry out the Internal  
Revenue laws of the United States. You  
are required to give us the information.  
We need it to ensure that you are com-  
plying with these laws and to allow us to  
If you have comments concerning the  
accuracy of these time estimates or sug-  
gestions for making this form simpler,  
we would be happy to hear from you.  
See the instructions for the tax return  
with which this form is filed.  
C-17  
Principal Business or  
Professional Activity  
Codes  
six-digit codes are based on the North American  
Industry Classification System (NAICS).  
estate agent). Now find the six-digit code assigned to  
this activity (for example, 531210, the code for offices  
of real estate agents and brokers) and enter it on  
Schedule C, line B.  
North American Industry  
Classification System (NAICS).  
Select the category that best describes your  
primary business activity (for example, Real Estate).  
Then select the activity that best identifies the principal  
source of your sales or receipts (for example, real  
These codes for the Principal Business or Professional  
Activity classify sole proprietorships by the type of  
activity they are engaged in to facilitate the  
Note. If your principal source of income is from  
farming activities, you should file Schedule F.  
administration of the Internal Revenue Code. These  
113000 Forestry & logging (including  
238170 Siding contractors  
238910 Site preparation contractors  
238120 Structural steel & precast  
concrete construction  
contractors  
238340 Tile & terrazzo contractors  
238290 Other building equipment  
contractors  
238390 Other building finishing  
contractors  
238190 Other foundation, structure, &  
building exterior contractors  
621400 Outpatient care centers  
Accommodation, Food  
forest nurseries & timber tracts)  
621900 Other ambulatory health care  
services (including ambulance  
Services, & Drinking Places  
114210 Hunting & trapping  
Support Activities for Agriculture &  
Forestry  
115210 Support activities for animal  
production (including farriers)  
Accommodation  
721310 Rooming & boarding houses,  
dormitories, & workers' camps  
721210 RV (recreational vehicle) parks  
& recreational camps  
721100 Traveler accommodation  
(including hotels, motels, & bed  
& breakfast inns)  
Food Services & Drinking Places  
722514 Cafeterias, grill buffets, &  
buffets  
722410 Drinking places (alcoholic  
beverages)  
722511 Full-service restaurants  
722513 Limited-service restaurants  
722515 Snack & non-alcoholic beverage  
bars  
722300 Special food services (including  
food service contractors &  
caterers)  
services, blood, & organ banks)  
Hospitals  
622000 Hospitals  
Nursing & Residential Care Facilities  
623000 Nursing & residential care  
facilities  
Social Assistance  
624410 Childcare services  
624200 Community food & housing, &  
emergency & other relief  
services  
115110 Support activities for crop  
production (including cotton  
ginning, soil preparation,  
planting, & cultivating)  
115310 Support activities for forestry  
Arts, Entertainment, &  
Recreation  
Amusement, Gambling, & Recreation  
Industries  
713100 Amusement parks & arcades  
713200 Gambling industries  
713900 Other amusement & recreation  
services (including golf courses,  
skiing facilities, marinas, fitness  
centers, bowling centers, skating  
rinks, miniature golf courses)  
Museums, Historical Sites, & Similar  
Institutions  
712100 Museums, historical sites, &  
similar institutions  
Performing Arts, Spectator Sports, &  
Related Industries  
711410 Agents & managers for artists,  
athletes, entertainers, & other  
public figures  
238990 All other specialty trade  
contractors  
Educational Services  
624100 Individual & family services  
624310 Vocational rehabilitation  
services  
611000 Educational services (including  
schools, colleges, &  
universities)  
Information  
Publishing Industries  
513000 Publishing industries  
Broadcasting & Content Providers &  
Telecommunications  
516000 Broadcasting & content  
providers  
517000 Telecommunications (including  
Wired, Wireless, Satellite, Cable  
& Other Program Distribution,  
Resellers, Agents, Other  
Telecommunications, & Internet  
service providers)  
Data Processing, Web Search Portals, &  
Other Information Services  
518210 Computing infrastructure  
providers, data processing, web  
hosting, & related services  
519200 Web search portals, libraries,  
archives, & other info. services  
Finance & Insurance  
Credit Intermediation & Related  
Activities  
522100 Depository credit intermediation  
(including commercial banking,  
savings institutions, & credit  
unions)  
522200 Nondepository credit  
intermediation (including sales  
financing & consumer lending)  
522300 Activities related to credit  
intermediation (including loan  
brokers)  
Insurance Agents, Brokers, & Related  
Activities  
524210 Insurance agencies &  
brokerages  
524290 Other insurance related  
activities  
Securities, Commodity Contracts, &  
Other Financial Investments & Related  
Activities  
523160 Commodity contracts  
intermediation  
523150 Investment banking & securities  
intermediation  
523210 Securities & commodity  
exchanges  
Administrative & Support and  
Waste Management &  
Remediation Services  
Administrative & Support Services  
561430 Business service centers  
(including private mail centers  
& copy shops)  
561740 Carpet & upholstery cleaning  
services  
561440 Collection agencies  
561450 Credit bureaus  
561410 Document preparation services  
561300 Employment services  
561710 Exterminating & pest control  
services  
561210 Facilities support (management)  
services  
561600 Investigation & security services  
561720 Janitorial services  
561730 Landscaping services  
711510 Independent artists, writers, &  
performers  
711100 Performing arts companies  
711300 Promoters of performing arts,  
sports, & similar events  
711210 Spectator sports (including  
professional sports clubs &  
racetrack operations)  
Motion Picture & Sound Recording  
512100 Motion picture & video  
industries (except video rental)  
Construction of Buildings  
236200 Nonresidential building  
construction  
236100 Residential building  
construction  
Heavy and Civil Engineering  
Construction  
237310 Highway, street, & bridge  
construction  
237210 Land subdivision  
237100 Utility system construction  
237990 Other heavy & civil engineering  
construction  
Specialty Trade Contractors  
238310 Drywall & insulation  
contractors  
238210 Electrical contractors  
238350 Finish carpentry contractors  
238330 Flooring contractors  
238130 Framing carpentry contractors  
238150 Glass & glazing contractors  
238140 Masonry contractors  
238320 Painting & wall covering  
contractors  
238220 Plumbing, heating & air-  
conditioning contractors  
238110 Poured concrete foundation &  
structure contractors  
512200 Sound recording industries  
Manufacturing  
315000 Apparel mfg.  
312000 Beverage & tobacco product  
mfg.  
334000 Computer & electronic product  
mfg.  
335000 Electrical equipment, appliance,  
& component mfg.  
332000 Fabricated metal product mfg.  
337000 Furniture & related product mfg.  
333000 Machinery mfg.  
339110 Medical equipment & supplies  
mfg.  
322000 Paper mfg.  
561110 Office administrative services  
561420 Telephone call centers  
(including telephone answering  
services & telemarketing  
bureaus)  
561500 Travel arrangement &  
reservation services  
561490 Other business support services  
(including repossession services,  
court reporting, & stenotype  
services)  
561790 Other services to buildings &  
dwellings  
561900 Other support services  
(including packaging & labeling  
services, & convention & trade  
show organizers)  
Waste Management & Remediation  
Services  
523900 Other financial investment  
activities (including investment  
advice)  
Health Care & Social Assistance  
Ambulatory Health Care Services  
621610 Home health care services  
621510 Medical & diagnostic  
laboratories  
621310 Offices of chiropractors  
621210 Offices of dentists  
621330 Offices of mental health  
practitioners (except physicians) 326000 Plastics & rubber products mfg.  
621320 Offices of optometrists  
324100 Petroleum & coal products mfg.  
331000 Primary metal mfg.  
323100 Printing & related support  
activities  
621340 Offices of physical,  
occupational & speech  
therapists, & audiologists  
313000 Textile mills  
562000 Waste management &  
remediation services  
621111 Offices of physicians (except  
mental health specialists)  
621112 Offices of physicians, mental  
health specialists  
314000 Textile product mills  
336000 Transportation equipment mfg.  
321000 Wood product mfg.  
339900 Other miscellaneous mfg.  
Chemical Manufacturing  
Agriculture, Forestry, Hunting, &  
Fishing  
112900 Animal production (including  
breeding of cats and dogs)  
621391 Offices of podiatrists  
621399 Offices of all other  
miscellaneous health  
practitioners  
325100 Basic chemical mfg.  
114110 Fishing  
238160 Roofing contractors  
C-18  
 
North American Industry Classification System (NAICS). (Continued)  
325500 Paint, coating, & adhesive mfg.  
325300 Pesticide, fertilizer, & other  
agricultural chemical mfg.  
325410 Pharmaceutical & medicine  
mfg.  
325200 Resin, synthetic rubber, &  
artificial & synthetic fibers &  
filaments mfg.  
325600 Soap, cleaning compound, &  
toilet preparation mfg.  
325900 Other chemical product &  
preparation mfg.  
Food Manufacturing  
311110 Animal food mfg.  
311800 Bakeries, tortilla, & dry pasta  
mfg.  
311500 Dairy product mfg.  
311400 Fruit & vegetable preserving &  
speciality food mfg.  
311200 Grain & oilseed milling  
311610 Animal slaughtering &  
processing  
311710 Seafood product preparation &  
packaging  
311300 Sugar & confectionery product  
mfg.  
311900 Other food mfg. (including  
coffee, tea, flavorings, &  
seasonings)  
Leather & Allied Product  
Manufacturing  
316210 Footwear mfg. (including  
leather, rubber, & plastics)  
316110 Leather & hide tanning &  
finishing  
316990 Other leather & allied product  
mfg.  
Nonmetallic Mineral Product  
Manufacturing  
327300 Cement & concrete product  
mfg.  
327100 Clay product & refractory mfg.  
327210 Glass & glass product mfg.  
327400 Lime & gypsum product mfg.  
327900 Other nonmetallic mineral  
product mfg.  
811190 Other automotive repair &  
maintenance (including oil  
change & lubrication shops &  
car washes)  
811310 Commercial & industrial  
machinery & equipment (except  
automotive & electronic) repair  
& maintenance  
811210 Electronic & precision  
equipment repair & maintenance  
811430 Footwear & leather goods repair  
811410 Home & garden equipment &  
appliance repair & maintenance  
811420 Reupholstery & furniture repair  
811490 Other personal & household  
goods repair & maintenance  
532282 Video tape & disc rental  
532289 Other consumer goods rental  
459410 Office supplies & stationery  
retailers  
459910 Pet & pet supplies retailers  
459510 Used merchandise retailers  
459990 All other miscellaneous retailers  
(including tobacco, candle, &  
trophy retailers)  
Religious, Grantmaking, Civic,  
Professional, & Similar  
Organizations  
813000 Religious, grantmaking, civic,  
professional, & similar  
Nonstore Retailers  
organizations  
xx  
Nonstore retailers sell all types  
of merchandise using such  
methods as Internet, mail-order  
catalogs, interactive television,  
or direct sales. These types of  
Retailers should select the PBA  
associated with their primary  
line of products sold.  
Retail Trade  
Building Material & Garden  
Equipment & Supplies Dealers  
444140 Hardware retailers  
444110 Home centers  
444200 Lawn & garden equipment &  
supplies retailers  
444120 Paint & wallpaper retailers  
444180 Other building materials dealers  
Clothing & Accessories Retailers  
458110 Clothing & clothing accessories  
retailers  
458310 Jewelry retailers  
458320 Luggage & leather goods  
retailers  
458210 Shoe retailers  
Electronic & Appliance Retailers  
449210 Electronics & appliance retailers  
(including computers)  
Food & Beverage Retailers  
445320 Beer, wine, & liquor retailers  
445250 Fish & seafood retailers  
445230 Fruit & vegetable retailers  
445100 Grocery & convenience retailers  
445240 Meat retailers  
445290 Other specialty food retailers  
445132 Vending machine operators  
Furniture & Home Furnishings  
Retailers  
449110 Furniture retailers  
449120 Home furnishings retailers  
Gasoline Stations & Fuel dealers  
457100 Gasoline stations (including  
convenience stores with gas)  
457210 Fuel dealers (including heating  
oil & liquefied petroleum)  
General Merchandise Retailers  
455000 General merchandise retailers  
Health & Personal Care Retailers  
456120 Cosmetics, beauty supplies, &  
perfume retailers  
456130 Optical goods retailers  
456110 Pharmacies & drug retailers  
456190 Other health & personal care  
retailers  
Motor Vehicle & Parts Dealers  
441300 Automotive parts, accessories,  
& tire retailers  
441222 Boat dealers  
xx  
For example, establishments  
primarily selling prescription  
and non-prescription drugs,  
select PBA code 456110  
Professional, Scientific, &  
Technical Services  
541100 Legal services  
Pharmacies & Drug Retailers.  
541211 Offices of certified public  
accountants  
541214 Payroll services  
541213 Tax preparation services  
541219 Other accounting services  
Architectural, Engineering, & Related  
Services  
541310 Architectural services  
541350 Building inspection services  
541340 Drafting services  
541330 Engineering services  
541360 Geophysical surveying &  
mapping services  
541320 Landscape architecture services  
541370 Surveying & mapping (except  
geophysical) services  
541380 Testing laboratories & services  
Computer Systems Design & Related  
Services  
541510 Computer systems design &  
related services  
Specialized Design Services  
541400 Specialized design services  
(including interior, industrial,  
graphic, & fashion design)  
Other Professional, Scientific, &  
Technical Services  
541800 Advertising, public relations, &  
related services  
541600 Management, scientific, &  
technical consulting services  
541910 Market research & public  
opinion polling  
541920 Photographic services  
541700 Scientific research &  
development services  
541930 Translation & interpretation  
services  
541940 Veterinary services  
541990 All other professional, scientific,  
& technical services  
Transportation & Warehousing  
481000 Air transportation  
485510 Charter bus industry  
484110 General freight trucking, local  
484120 General freight trucking, long  
distance  
485210 Interurban & rural bus  
transportation  
486000 Pipeline transportation  
482110 Rail transportation  
487000 Scenic & sightseeing  
transportation  
485410 School & employee bus  
transportation  
484200 Specialized freight trucking  
(including household moving  
vans)  
485300 Taxi, limousine, & ridesharing  
service  
485110 Urban transit systems  
483000 Water transportation  
485990 Other transit & ground  
passenger transportation  
488000 Support activities for  
transportation (including motor  
vehicle towing)  
Couriers & Messengers  
492000 Couriers & messengers  
Warehousing & Storage Facilities  
Mining  
212110 Coal mining  
211120 Crude petroleum extraction  
212200 Metal ore mining  
211130 Natural gas extraction  
212300 Nonmetallic mineral mining &  
quarrying  
493100 Warehousing & storage (except  
leases of miniwarehouses &  
self-storage units)  
Utilities  
221000 Utilities  
213110 Support activities for mining  
Other Services  
Personal & Laundry Services  
812111 Barber shops  
812112 Beauty salons  
812220 Cemeteries & crematories  
Wholesale Trade  
Merchant Wholesalers, Durable Goods  
423200 Furniture & home furnishing  
423700 Hardware, & plumbing &  
heating equipment & supplies  
441227 Motorcycle, ATV, & all other  
motor vehicle dealers  
441110 New car dealers  
441210 Recreational vehicle dealers  
(including motor home & travel  
trailer dealers)  
441120 Used car dealers  
Sporting Goods, Hobby, Book, Musical  
Instrument & Miscellaneous Retailers  
459210 Book retailers & news dealers  
(including newsstands)  
459120 Hobby, toy, & game retailers  
459140 Musical instrument & supplies  
retailers  
459130 Sewing, needlework, & piece  
goods retailers  
459110 Sporting goods retailers  
459920 Art dealers  
459310 Florists  
459420 Gift, novelty, & souvenir  
retailers  
459930 Manufactured (mobile) home  
dealers  
812310 Coin-operated laundries &  
drycleaners  
812320 Drycleaning & laundry services  
(except coin-operated)  
(including laundry &  
drycleaning drop-off & pickup  
sites)  
812210 Funeral homes & funeral  
services  
812330 Linen & uniform supply  
812113 Nail salons  
812930 Parking lots & garages  
812910 Pet care (except veterinary)  
services  
812920 Photofinishing  
812190 Other personal care services  
(including diet & weight  
reducing centers)  
812990 All other personal services  
Repair & Maintenance  
811120 Automotive body, paint, interior,  
& glass repair  
811110 Automotive mechanical &  
electrical repair & maintenance  
423600 Household appliances &  
electrical & electronic goods  
423940 Jewelry, watch, precious stone,  
& precious metals  
423300 Lumber & other construction  
materials  
423800 Machinery, equipment, &  
supplies  
423500 Metal & mineral (except  
petroleum)  
423100 Motor vehicle & motor vehicle  
parts & supplies  
423400 Professional & commercial  
equipment & supplies  
423930 Recyclable materials  
423910 Sporting & recreational goods &  
supplies  
423920 Toy & hobby goods & supplies  
423990 Other miscellaneous durable  
goods  
Merchant Wholesalers, Nondurable  
Goods  
Real Estate & Rental & Leasing  
Real Estate  
531100 Lessors of real estate (including  
miniwarehouses & self-storage  
units)  
531210 Offices of real estate agents &  
brokers  
531320 Offices of real estate appraisers  
531310 Real estate property managers  
531390 Other activities related to real  
estate  
Rental & Leasing Services  
532100 Automotive equipment rental &  
leasing  
532400 Commercial & industrial  
machinery & equipment rental  
& leasing  
532210 Consumer electronics &  
appliances rental  
532281 Formal wear & costume rental  
532310 General rental centers  
532283 Home health equipment rental  
532284 Recreational goods rental  
424300 Apparel, piece goods, & notions  
C-19  
North American Industry Classification System (NAICS). (Continued)  
424800 Beer, wine, & distilled alcoholic 424910 Farm supplies  
beverages  
424700 Petroleum & petroleum products  
Wholesale Trade Agents &  
Brokers  
424930 Flower, nursery stock, & florists' 424940 Tobacco products & electronic  
424920 Books, periodicals, &  
newspapers  
supplies  
cigarettes  
425120 Wholesale trade agents &  
brokers  
424400 Grocery & related products  
424950 Paint, varnish, & supplies  
424100 Paper & paper products  
424990 Other miscellaneous nondurable  
goods  
424600 Chemical & allied products  
424210 Drugs & druggists' sundries  
424500 Farm product raw materials  
999000 Unclassified establishments  
(unable to classify)  
C-20