A password manager subscription belongs on Line 18, office expense.
Why line 18
A password manager protects the accounts the business runs on, which makes it ordinary office overhead on line 18, and a plan billed monthly or yearly is a period cost. A family plan that also covers the household is deductible only to the extent it serves the business, so a business tier or a team seat is easier to support than a split of a family plan.
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 password manager subscription lands on Line 18 without you sorting it.
Start for freeWhat a password manager subscription is confused with
- Line 27a, other expenses
- Security services beyond password storage, an identity monitoring retainer for instance, read better itemised in Part V and carried to line 27a than as office expense.
- not deductible, not deductible
- A family plan bought for the household and never used for business logins is a personal cost with no deduction.
Examples that belong on line 18
- $7.99 a month for a 1Password Business seat
- $3 a user a month for Bitwarden Teams covering two seats
- $35.88 a year for a 1Password Individual plan used only for work logins
- $60 a year for Dashlane Premium on the work laptop
What does not belong here
- The household share of a family password plan.
- A hardware security key, which is equipment rather than a subscription.
- An identity theft protection product bought for the family.
What to keep
Keep the annual receipt and, for a team plan, the seat list. An invoice in the business name on a business tier is the easiest version of this to defend.
Other expenses on line 18
| Expense | Line |
|---|---|
| a desk lamp | Schedule C, Line 18 |
| a mixed order of supplies and groceries | Schedule C, Line 18 |
| a paper shredder | Schedule C, Line 18 |
| a PO box rental | Schedule C, Line 18 |
| a software subscription | Schedule C, Line 18 |
| a virtual mailbox | Schedule C, Line 18 |
| a work app subscription | Schedule C, Line 18 |
| accounting software | Schedule C, Line 18 |
| cloud storage | Schedule C, Line 18 |
| office coffee | Schedule C, Line 18 |
| office stationery | Schedule C, Line 18 |
| postage | Schedule C, Line 18 |
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 password manager subscription lands on Line 18 without you sorting it.
Start for free