A background check belongs on Line 27a, other expenses.
Why line 27a
A screening fee is a hiring and vetting cost with no named Part II line, so it is described in Part V and carried to line 27a. It is deductible whether you run the check on a prospective employee, on a contractor you are about to engage, or on a partner you are about to work with, as long as the reason is the business. Keep it out of wages: the fee is yours, not the worker's pay, and it is not a benefit provided to them.
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 background check lands on Line 27a without you sorting it.
Start for freeWhat a background check is confused with
- Line 17, legal and professional services
- If an attorney or a licensed investigator runs the enquiry as part of a professional engagement and bills it that way, it is legal and professional services on line 17.
- Line 23, taxes and licenses
- A fee paid to a government agency for mandatory fingerprinting or a state clearance that a licence depends on is a licence cost on line 23.
Examples that belong on line 27a
- $39 Checkr check on a new 1099 installer
- $29 motor vehicle record check on a delivery driver
- $55 county criminal records search before hiring an office manager
- $18 identity verification on a remote contractor
- $95 of credit checks on two prospective wholesale customers
What does not belong here
- Checks run on a tenant of a rental property, which belong on Schedule E.
- A government fingerprinting or clearance fee tied to your own licence, which is line 23.
- The worker's own licence or certification fee that you reimburse, which is treated as pay or as a benefit depending on the arrangement.
- A personal check run on a landlord or a babysitter.
What to keep
Keep the vendor invoice and a note of the role being filled. Screening reports themselves contain sensitive personal data, so retain the invoice for tax purposes and handle the report under the consumer reporting rules.
Other expenses on line 27a
| Expense | Line |
|---|---|
| a branded gift for a client | Schedule C, Line 27a |
| a business coach | Schedule C, Line 27a |
| a conference registration fee | Schedule C, Line 27a |
| a hot-desk day pass | Schedule C, Line 27a |
| a payroll service | Schedule C, Line 27a |
| a professional certification renewal | Schedule C, Line 27a |
| a stock photo license | Schedule C, Line 27a |
| a telephone answering service | Schedule C, Line 27a |
| a trade show booth fee | Schedule C, Line 27a |
| a translation service | Schedule C, Line 27a |
| an online course | Schedule C, Line 27a |
| bank fees | Schedule C, Line 27a |
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 background check lands on Line 27a without you sorting it.
Start for free