Schedule C Deductions for Self-Employed Contractors
In short
Schedule C has a numbered line for each type of business expense. Materials usually land under Supplies, subcontractor pay under Contract Labor, your truck under Car and Truck Expenses, and almost anything else fits under Other Expenses. Getting a cost on the right line is less important than capturing it at all.
Not tax advice. This maps trade expenses to Schedule C line by line in plain terms; a tax preparer should confirm the specifics for your return.
What Schedule C Is
If you are a sole proprietor, and most solo tradespeople are, Schedule C (Form 1040) is where your business income and expenses live. It takes what you brought in, subtracts what it cost you to earn it, and the result, your net profit, is what actually gets taxed and what your self-employment tax is calculated on. Every dollar of a real business expense you get onto this form is a dollar you are not taxed on twice.
Where Trade Expenses Actually Go
Schedule C's expense section runs from line 8 to line 27, each one a specific category. Source: IRS Instructions for Schedule C. Here is where the costs a contractor actually has tend to land:
| What you spent it on | Schedule C line |
|---|---|
| Job materials and small supplies | Line 22, Supplies |
| Subcontractor or helper pay (not W-2 employees) | Line 11, Contract Labor |
| Vehicle costs (mileage or actual expenses) | Line 9, Car and Truck Expenses |
| Business insurance | Line 15, Insurance |
| Trade licenses and permit fees | Line 23, Taxes and Licenses |
| Accountant, bookkeeper, or legal fees | Line 17, Legal and Professional Services |
| A dedicated home office space | Line 30, Business Use of Home |
| Tools and equipment with a useful life over a year | Line 13, Depreciation (or expensed the year you bought it under Section 179) |
| Repairs to tools or equipment | Line 21, Repairs and Maintenance |
| Phone, software subscriptions, small purchases that do not fit elsewhere | Line 27, Other Expenses |
W-2 employee wages, if you have any, go on line 26, Wages, which is a different line from what you pay a subcontractor.
The Line Names Do Not Match How Tradespeople Think
This is the actual reason write offs get missed. Nobody thinks in terms of "Line 22." They think "I bought some fittings for the Hendricks job." The form asks you to sort that thought into an IRS category after the fact, at tax time, usually from a shoebox or a bank statement with no memory attached to any individual charge. That translation step is where legitimate costs quietly fall out.
Materials and Contract Labor Are the Two That Matter Most
For most trades, the dollar amount on Supplies (materials) and Contract Labor (subs and helpers) dwarfs everything else on the form combined. They are also the two paid for in the moment, often in cash or on a card at a supply house counter, with no automatic record beyond a receipt that gets balled up in a cupholder. If those two categories are tracked accurately, most of your Schedule C is already correct.
Vehicle Expenses Need a Choice, Made Once
Line 9 asks for either the standard mileage rate or actual vehicle costs, not both for the same vehicle in the same year. The 2026 standard rate is 72.5 cents a mile. The full breakdown, including what counts as a business mile and what a mileage log needs to hold up, is in the 2026 IRS mileage rate for self-employed contractors.
How to Actually Get the Numbers Right
The categories on Schedule C are fixed. What is not fixed is when you decide what category a cost belongs in. Doing it once a year, from memory, is how real expenses go unclaimed. Doing it the moment you spend the money, while the job and the purpose are still obvious, is how the form ends up accurate. A receipt scanned and tagged to a job at the counter of the supply house already carries the two pieces of information Schedule C actually wants: what it was, and what it was for.
For the full list of what typically qualifies before it gets to the form, see what a self-employed contractor can deduct.
FAQ
What line is materials on Schedule C?
Materials and small job supplies generally go on line 22, Supplies. Tools and equipment with a useful life over a year are more often depreciation, line 13, or expensed the year of purchase under Section 179.
What line is subcontractor pay on Schedule C?
Line 11, Contract Labor. This is for anyone you paid to help on a job who is not your W-2 employee. W-2 wages go on a different line, 26.
Do I need receipts for every Schedule C expense?
Yes, in practice. The IRS can ask you to substantiate any deduction, and a category on a form with no record behind it is the first thing questioned. A receipt kept and tagged to the job at the time of purchase is the strongest record you can have.
What is the difference between Schedule C and a 1099?
A 1099 is a form someone else sends you (or you send a subcontractor) reporting money paid during the year. Schedule C is the form where you report your total business income and expenses, 1099s included, to arrive at your net profit.
In One Paragraph
Schedule C has a specific line for each kind of business expense, materials under Supplies, subcontractor pay under Contract Labor, your truck under Car and Truck Expenses, and most of what does not fit elsewhere under Other Expenses. The lines themselves are simple. What is hard is remembering every cost accurately enough, months later, to sort it correctly, which is why capturing it at the moment you spend it beats reconstructing it in April every time.
Download VanReceipts on the App Store and keep every job's costs sorted as you go.