Real estate property tax on a business building belongs on Line 23, taxes and licenses.
Why line 23
Real estate tax on a building you own and use in the business is deductible on line 23. Two carve outs matter. Tax on your home or on personal use property is not a line 23 item, so a home with an office in it runs through the home office calculation and reaches the return on line 30 at your business use percentage instead. Assessments levied to pay for local improvements such as paving or sewers are not deductible either: they are added to the property's basis and recovered through depreciation.
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 real estate property tax on a business building lands on Line 23 without you sorting it.
Start for freeWhat real estate property tax on a business building is confused with
- Line 30, line 30, business use of your home
- Property tax on a home containing a home office is not a full line 23 deduction; it enters Form 8829 and reaches the return on line 30 at the business percentage.
- Schedule A, schedule a, personal itemised deduction
- Property tax on your residence, outside any home office share, is a personal itemised deduction on Schedule A.
- Form 4562, form 4562, carried to schedule c line 13
- A special assessment for paving, sewers or similar local improvements is added to the property's basis and recovered through depreciation rather than deducted.
Examples that belong on line 23
- $6,200 of county real estate tax on a workshop you own and use for the business
- $3,480 of city property tax on a retail unit
- A $1,550 quarterly property tax instalment on a small warehouse
- $0 deducted on line 23 for the home you live in, with the office share going to line 30
- $940 of property tax apportioned to a detached studio used only for the business
What does not belong here
- Property tax on your home, which goes through line 30 or Schedule A.
- Special assessments for paving and sewers, which are capitalised.
- Property tax on a rental you do not use in your trade, which belongs on Schedule E.
- Transfer tax on buying the building, which is part of its cost.
What to keep
Keep the assessor's bill and the payment record, and keep any special assessment line on the bill separate because it is treated differently. For a mixed property, keep the allocation you used.
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 |
| a state professional license renewal | 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 |
| sales tax you collected and remitted | Schedule C, Line 23 |
Related lookups
- Can I deduct homeowners insurance for an office?
- Where does state income tax go on Schedule C?
- Where does a website build go 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 real estate property tax on a business building lands on Line 23 without you sorting it.
Start for free