Schedule C Expenses - Supplies
When filing your tax return using Schedule C (Form 1040), you may deduct ordinary and necessary business expenses, including supplies used in your trade or business. Supplies are considered a deductible business expense if they are directly related to your business operations and are not personal in nature.
What Qualifies as a Business Supply?
- Office supplies such as paper, pens, printer ink, and folders.
- Materials used in the production of goods or services (e.g., craft supplies for a handmade goods business).
- Software licenses or subscriptions used for business purposes.
- Marketing materials like flyers, brochures, or business cards.
These supplies must be used primarily for business purposes. Personal use of supplies is not deductible.
Reporting Supplies on Schedule C
Supplies are reported on Line 27b of Schedule C (Form 1040) under “Other expenses.” You must list the type and amount of each supply expense separately in the space provided. The total of all such expenses should be entered on Line 48 and then carried to Line 27b.
Important: Do not include the cost of business equipment or furniture, replacements or permanent improvements to property, or personal, living, and family expenses. These are not deductible as supplies.
Additional Notes
- Supplies are considered “ordinary and necessary” if they are common and accepted in your industry and help your business operate.
- If you use the simplified method for home office expenses, supplies used in the home office are still deductible on Line 27b, but only the portion attributable to business use.
- For statutory employees, supplies used in performing job duties are deductible on Schedule C and reported on Schedule 1 (Form 1040), line 3.
Source:
Schedule C (Form 1040) Instructions
Disclaimer: Always verify details with the official Federal or State Department of Revenue Forms and Instructions before filing your tax return.