Line 23 on Schedule C of the tax form relates to “Taxes and Licenses,” which refers to the cost of taxes and licenses that are required to operate your business.
Taxes and licenses expenses that you may be able to deduct on Line 23 include:
- Business license fees: This includes any fees you paid to obtain a business license or permit to operate your business in a particular location.
- State and local taxes: This includes any state or local taxes you paid on the income earned from your business, such as sales taxes or income taxes.
- Real estate taxes: This includes any property taxes you paid on real estate used in your business.
- Personal property taxes: This includes any taxes you paid on personal property used in your business, such as equipment, inventory, or furniture.
It’s important to note that there are certain requirements and limitations associated with deducting taxes and licenses expenses. For example, the expenses must be ordinary and necessary for your business, and you must keep accurate records of the expenses, including receipts, invoices, and other documentation.
If you have any questions about how to report taxes and licenses expenses on your tax return, it’s a good idea to consult with a tax professional or accountant.