A freelance developer or designer belongs on Line 11, contract labor.
Why line 11
A developer or designer who invoices you for project work is contract labor, so ongoing work goes on line 11. The trap is scope: hours spent fixing bugs, tweaking pages or producing deliverables for a client are a current expense, while a build that creates a new long-lived asset for your own business is capitalised and depreciated instead. If the work is for a client job you are reselling, it is still line 11; if it produced an asset you will use for years, it goes through Form 4562 to line 13.
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 freelance developer or designer lands on Line 11 without you sorting it.
Start for freeWhat a freelance developer or designer is confused with
- Form 4562, form 4562, carried to schedule c line 13
- Pay for building something you will use for several years is capitalised on Form 4562 and reaches line 13; pay for maintenance and iteration stays on line 11.
- Line 26, wages
- A developer you direct full time on your schedule, with your equipment, is an employee, so the pay is wages on line 26.
- Line 18, office expense
- Hosting, repositories and design tool subscriptions are software costs on line 18, not payments to a person.
Examples that belong on line 11
- 3,200 dollars to a React contractor for a feature on a client's app
- 1,500 dollars to a designer for a client's brand refresh
- An 800 dollar invoice for bug fixes and small changes to your own site
- 2,400 dollars to a contractor who built one integration you resold
- A 95 dollar an hour developer retained for ten hours a month of upkeep
What does not belong here
- A full ground-up build of your own platform, which is capitalised
- Domain, hosting and plugin renewals, which are line 18
- Paid ads for the finished site, which are advertising on line 8
- Equity or revenue share given instead of cash, which is not a cash expense
What to keep
Keep statements of work that describe what was built, the invoices and the payment records, plus a W-9. The statement of work is what decides the expense-or-capitalise question later.
Other expenses on line 11
| Expense | Line |
|---|---|
| a freelance editor or bookkeeper | Schedule C, Line 11 |
| a freelance photographer | Schedule C, Line 11 |
| a staffing agency invoice | Schedule C, Line 11 |
| a subcontractor on a client project | Schedule C, Line 11 |
| a virtual assistant | Schedule C, Line 11 |
| a website bug fix by a contractor | Schedule C, Line 11 |
Related lookups
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- Where does printer ink 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 a freelance developer or designer lands on Line 11 without you sorting it.
Start for free