A state professional license renewal belongs on Line 23, taxes and licenses.
Why line 23
A renewal fee paid to a state board to keep practising is a regulatory fee for your trade, so it belongs on line 23 in the year you pay it. Dues to a voluntary professional body are a different cost and most filers itemise those in Part V on line 27a, because they are not taxes or government fees. The initial cost of qualifying for a profession is different again: schooling that qualifies you for a new trade is not deductible, even though the license renewals that follow are.
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 a state professional license renewal lands on Line 23 without you sorting it.
Start for freeWhat a state professional license renewal is confused with
- Line 27a, other expenses
- A mandatory government renewal fee is line 23, while voluntary association dues and subscriptions are usually itemised on line 27a.
- not deductible, not deductible
- Education that qualifies you for a new profession is not deductible, so bar review or a licensing course sits outside line 23 while the annual renewal belongs on it.
- Form 4562, form 4562, carried to schedule c line 13
- A transferable license you purchase, such as a liquor license or a medallion, is a capital cost amortised through Form 4562 rather than an annual fee.
Examples that belong on line 23
- A $120 state CPA license renewal
- A $265 two year nursing license renewal
- A $225 real estate salesperson license renewal
- A $80 cosmetology license renewal with the state board
- A $340 engineering board renewal plus a $30 processing fee
What does not belong here
- Continuing education courses, which are not a license fee.
- Voluntary membership dues, which most filers put on line 27a.
- The cost of qualifying for the profession in the first place.
- A late renewal penalty charged by the board.
What to keep
Keep the board receipt or the online renewal confirmation showing the license number and the period. Separate the renewal fee from any continuing education bought in the same transaction.
Other expenses on line 23
| Expense | Line |
|---|---|
| a city or county business license | Schedule C, Line 23 |
| a state franchise tax or LLC annual fee | Schedule C, Line 23 |
| employer payroll taxes and the employer half of FICA | Schedule C, Line 23 |
| federal and state unemployment tax | Schedule C, Line 23 |
| personal property tax on business equipment | Schedule C, Line 23 |
| real estate property tax on a business building | Schedule C, Line 23 |
| sales tax you collected and remitted | Schedule C, Line 23 |
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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 a state professional license renewal lands on Line 23 without you sorting it.
Start for free