Payments to your spouse belongs on Line 26, wages.
Why line 26
Paying a spouse as a contractor is usually the wrong answer. A spouse who works in your business under your direction is an employee, so the pay is wages on line 26 with a W-2 and payroll tax, and a 1099-NEC to a spouse is a classification problem waiting to happen. If you both run the business as co-owners, it is not one Schedule C at all: it is a partnership, or a qualified joint venture split across two Schedule C forms. The deduction that usually does pay off is line 14, where family health coverage provided to a spouse employee can be deducted as an employee benefit.
Stop looking up lines one at a time. ClaryBook totals your year into an IRS Schedule C worksheet in form order, Part I and Part II line by line, so payments to your spouse lands on Line 26 without you sorting it.
Start for freeWhat payments to your spouse is confused with
- Line 11, contract labor
- Line 11 only fits if your spouse operates a genuinely separate business with other clients and invoices you at arm's length.
- Line 14, employee benefit programs
- Health and other benefits provided to a spouse who is a legitimate employee go on line 14, not with cash wages.
- not deductible, not deductible
- Shifting income to a spouse who does no real work is not deductible, and on a joint return it moves no tax anyway.
Examples that belong on line 26
- A spouse on payroll at 25 dollars an hour doing scheduling and invoicing
- A spouse paid as an employee so family health coverage can run through the business
- Two spouses both materially participating, filing a qualified joint venture as two Schedule C forms
- A spouse who runs a separate design practice invoicing you for one project
- A spouse employee covered by a written job description and timesheets
What does not belong here
- A 1099-NEC to a spouse working under your direction
- An owner draw to a spouse, which is not a deductible expense
- Pay for work nobody performed
- Splitting income with a spouse without either payroll or a joint venture election
The limit that applies
A spouse employee's wages are subject to Social Security and Medicare withholding, unlike a child under 18; the family exemptions that apply to children do not apply to a spouse.
What to keep
If the spouse is an employee, keep a job description, timesheets, payroll records and a W-2. If you are co-owners instead, document the qualified joint venture split or file as a partnership.
Other expenses on line 26
| Expense | Line |
|---|---|
| an employee bonus | Schedule C, Line 26 |
| an employee's gross wages | Schedule C, Line 26 |
| vacation and sick pay | Schedule C, Line 26 |
| wages paid to your own child | Schedule C, Line 26 |
Related lookups
- Where do subcontractors go on Schedule C?
- Where does employee health insurance go on Schedule C?
- Is a car payment deductible on Schedule C?
Sources
This page explains how Schedule C lines work. It is general information, not tax advice for your situation. If an expense is large or the answer turns on a fact about your business, confirm it with your tax preparer.
Looking for a different expense? The full Schedule C line lookup has every line from 8 to 27 with the expenses that belong on each, and Schedule C expense categories walks the whole form in order.
Stop looking up lines one at a time. ClaryBook totals your year into an IRS Schedule C worksheet in form order, Part I and Part II line by line, so payments to your spouse lands on Line 26 without you sorting it.
Start for free