A rented dedicated server belongs on Line 20a, rent or lease of vehicles, machinery and equipment.
Why line 20a
Renting physical hardware you do not own, a dedicated server or a leased network appliance, is rent of equipment, which is line 20a. Renting rack or cage space in a data centre for hardware you own is premises rather than equipment, so that part is 20b. Cloud and shared hosting is a third thing: there is no identified machine, so those bills are office expense on line 18, or advertising on line 8 when what they host is a marketing site.
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 rented dedicated server lands on Line 20a without you sorting it.
Start for freeWhat a rented dedicated server is confused with
- Line 20b, rent or lease of other business property
- Colocation, where you own the hardware and rent the rack or cage it sits in, is rent of other business property on 20b, while renting the machine itself is 20a.
- Line 18, office expense
- A cloud or shared hosting plan sells you capacity rather than a machine, so it is office expense on line 18 and line 20 does not apply.
- Line 8, advertising
- Hosting whose purpose is a marketing site or a campaign landing page is advertising on line 8 even when it arrives as a hosting invoice.
Examples that belong on line 20a
- $189 a month for a dedicated server on a monthly rental
- $450 a month for two leased firewall appliances
- $2,268 of annual dedicated server rental for a software business
- $120 a month for a half rack of colocation space, which is 20b
What does not belong here
- A shared or cloud hosting plan, which is office expense.
- A server you bought outright, which is depreciated.
- Domain registration and certificates, which are small overhead items rather than rent.
What to keep
Keep the hosting or lease agreement and the monthly invoices. The agreement is what shows whether you are renting a machine, renting space, or buying capacity, and that is what decides the line.
Other expenses on line 20a
| Expense | Line |
|---|---|
| a leased copier or printer | Schedule C, Line 20a |
| a leased trailer | Schedule C, Line 20a |
| a leased vehicle | Schedule C, Line 20a |
| car lease payments | Schedule C, Line 20a |
| equipment and tool rental | Schedule C, Line 20a |
Related lookups
- Where does office rent go on Schedule C?
- Where does printer ink go on Schedule C?
- Where does Google Ads spend 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 rented dedicated server lands on Line 20a without you sorting it.
Start for free