On Schedule C, Line 20, you report rent or lease expenses related to your business. This line is divided into two parts: Line 20a for rental or lease costs of vehicles, machinery, or equipment, and Line 20b for rent or lease of other property, such as office space.
Line 20a: Rental or Lease of Vehicles, Machinery, or Equipment
- Enter the business portion of your rental cost for vehicles, machinery, or equipment.
- If you leased a vehicle for 30 days or more, you may need to reduce your deduction by the inclusion amount. Refer to Chapter 4 of IRS Publication 463, "Leasing a Car," to calculate this amount.
- If you deduct actual expenses for a leased vehicle, you must report rent or lease payments on Line 20a.
Line 20b: Rental or Lease of Other Property
- Enter amounts paid to rent or lease property other than vehicles, machinery, or equipment—such as office space in a building.
Important Notes
- For vehicles, if you use the standard mileage rate (currently $0.70 per mile for 2025), you cannot deduct rent or lease payments on Line 20a. Instead, you deduct the mileage rate on Line 9.
- If you deduct actual expenses for a vehicle, you must include rent or lease payments on Line 20a.
- For vehicles leased under a long-term agreement (30+ days), the inclusion amount reduces your deductible rental expense. This is governed by the rules in IRS Pub. 463.
Source:
Schedule C Instructions (2025)
Disclaimer: Always verify details with the current IRS Form and Instructions, and consult a tax professional for personalized advice.