A surety or performance bond premium belongs on Line 15, insurance.
Why line 15
The premium you pay a surety to issue a bid, performance or license bond is a business insurance cost on line 15. Only the premium is deductible: collateral or cash you post with the surety is a deposit you expect back, so nothing is deducted until it is actually forfeited. The state fee the bond supports is a separate item and is not part of the premium.
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 surety or performance bond premium lands on Line 15 without you sorting it.
Start for freeWhat a surety or performance bond premium is confused with
- Line 23, taxes and licenses
- The state filing or license fee the bond supports is taxes and licenses on line 23; what the surety charges you is insurance on line 15.
- Line 27a, other expenses
- Some preparers list bond premiums in other expenses on line 27a; either placement is defensible, but never deduct the same premium in both places.
Examples that belong on line 15
- A $450 premium for a $25,000 contractor license bond
- $1,200 for a performance bond on a municipal paving contract
- A $100 notary bond renewal
- A $300 bid bond premium on a public project you did not win
What does not belong here
- Collateral posted with the surety, which is a refundable deposit
- The license fee itself, which is line 23
- Amounts the surety pays out and bills back to you, which are the cost of the underlying failure
What to keep
Keep the bond, the surety's premium invoice, and proof of any collateral posted so a later refund is not mistaken for income.
Other expenses on line 15
| Expense | Line |
|---|---|
| a business owner's policy | Schedule C, Line 15 |
| business interruption insurance | Schedule C, Line 15 |
| commercial property insurance | Schedule C, Line 15 |
| cyber liability insurance | Schedule C, Line 15 |
| general liability insurance | Schedule C, Line 15 |
| professional liability insurance | Schedule C, Line 15 |
| workers' compensation insurance | Schedule C, Line 15 |
Related lookups
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 surety or performance bond premium lands on Line 15 without you sorting it.
Start for free