Schedule C Expenses

Depletion

Depletion (line 12) is a deduction for exhaustible natural resources such as mineral deposits or timber.

Depreciation and section 179 expense deduction

Depreciation and section 179 expense deduction (line 13) are covered later.

Employee Benefit Programs

Employee benefit programs (line 14) includes payments you make for your employees for accident and health insurance, term life insurance and dependent care assistance programs. Other employee benefit programs include educational assistance programs, achievement awards for length of service and adoption assistance programs. Do not include any contributions you make on your own behalf. You may be able to claim health insurance premiums for yourself or family on line 29 of Form 1040 or as an itemized medical deduction on Schedule A.

Insurance

Insurance (line 15) costs related to the operation of your business are deductible. Deduct payments for liability coverage on business property, fire, theft, and robbery. You may be able to deduct as an adjustment to income on line 29 of Form 1040, all or part of the amount paid for health insurance for yourself, your spouse and dependents if you are self employed and had a net profit for the year. This topic will be covered later. Do no include health insurance here.

Interest

Interest (line 16) on any loans used to finance your business is deductible. If you received a Form 1098 from a bank or financial institution, enter the interest on line 16a. If you did not receive a Form 1098, enter the interest on line 16b. Include your credit card interest if used to make business purchases.

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