Is accounting software line 18 or line 17?

Line 17 is fees paid to a person for legal or accounting work, so a bookkeeper's monthly invoice is line 17 while the software you do the work in is line 18.

Is accounting software line 18 or line 27a?

If a bundled bill mixes software with a service that has no natural home, itemise the service part in Part V and carry it to line 27a rather than burying it in office expense.

Where does accounting software go on Sch C? Line 18

Q: Where does accounting software go on Sch C?

Accounting software belongs on Line 18, office expense. Bookkeeping software runs the administration of the business, which is what line 18 is for, and a monthly or annual plan is a period cost rather than an asset. Some preparers put it on line 17 next to the accountant's fee instead. Both land in the same place on the bottom line, so pick one treatment and keep it year to year rather than splitting the same vendor across two lines.

Short answer Schedule C, Line 18 Office expense

Accounting software belongs on Line 18, office expense.

Why line 18

Bookkeeping software runs the administration of the business, which is what line 18 is for, and a monthly or annual plan is a period cost rather than an asset. Some preparers put it on line 17 next to the accountant's fee instead. Both land in the same place on the bottom line, so pick one treatment and keep it year to year rather than splitting the same vendor across two lines.

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 accounting software lands on Line 18 without you sorting it.

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What accounting software is confused with

Line 17, legal and professional services: Line 17 is fees paid to a person for legal or accounting work, so a bookkeeper's monthly invoice is line 17 while the software you do the work in is line 18.
Line 27a, other expenses: If a bundled bill mixes software with a service that has no natural home, itemise the service part in Part V and carry it to line 27a rather than burying it in office expense.

Examples that belong on line 18

$30 a month for a small business bookkeeping subscription
$99 a year for tax filing software covering the business return
$180 a year for a receipt scanning tool feeding the books
$55 a month for payroll software running two employees

What does not belong here

The bookkeeper's or CPA's own fee, which is line 17.
The personal share of a filing fee that covers both the business and the family return.
A perpetual desktop licence bought outright for a long period of use.

What to keep

Keep the vendor invoices for the year. If one filing fee covers both a personal and a business return, keep a note of how you split it.

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 password manager subscription	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
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.

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