A leased trailer belongs on Line 20a, rent or lease of vehicles, machinery and equipment.
Why line 20a
A trailer is equipment, so hire or lease payments on one go on line 20a. The same split applies as with any vehicle or machine: the rental cost is 20a, the tow vehicle's fuel and running costs are line 9, and ground rent for where the trailer sits is 20b. A hire purchase that ends in ownership is a purchase, so the trailer is depreciated instead of rented.
On the printed form this is line 20a. Line 20 is the total of 20a and 20b, so a worksheet that reports one line 20 figure is adding the two together.
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 leased trailer lands on Line 20a without you sorting it.
Start for freeWhat a leased trailer is confused with
- Line 20b, rent or lease of other business property
- The yard or pitch you rent to park or store the trailer is other business property on 20b, while the trailer itself is equipment on 20a.
- Form 4562, form 4562, carried to schedule c line 13
- A rent to own trailer agreement transfers ownership, so the trailer is depreciated on Form 4562 and only the interest is an expense.
- Line 23, taxes and licenses
- Registration and plates for the trailer are a licence cost on line 23, separate from the hire payments on 20a.
Examples that belong on line 20a
- $185 a month for a leased enclosed cargo trailer
- $75 a day for a dump trailer hired for a three day clearance job
- $2,220 of annual lease payments on a refrigerated trailer
- $110 a month for a tool trailer leased for a seasonal crew
What does not belong here
- Registration and plates, which belong with taxes and licences.
- A rent to own agreement that transfers ownership.
- Repairs on a trailer you own, which are repairs rather than rent.
What to keep
Keep the lease or hire agreement and the invoices. For trailers hired per job, note the job so the cost is tied to the work.
Other expenses on line 20a
| Expense | Line |
|---|---|
| a leased copier or printer | Schedule C, Line 20a |
| a leased vehicle | Schedule C, Line 20a |
| a rented dedicated server | Schedule C, Line 20a |
| car lease payments | Schedule C, Line 20a |
| equipment and tool rental | Schedule C, Line 20a |
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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 leased trailer lands on Line 20a without you sorting it.
Start for free