Equipment and tool rental belongs on Line 20a, rent or lease of vehicles, machinery and equipment.
Why line 20a
Hiring a machine or a tool for a job is rent of machinery and equipment, which is line 20a. The length of the hire does not matter, and neither does the fact that the machine was used on a billable job: 20a takes the rental cost either way. Only if the inventory rules apply to you and the hire is a direct cost of producing goods does its cost get pulled into Part III instead.
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 equipment and tool rental lands on Line 20a without you sorting it.
Start for freeWhat equipment and tool rental is confused with
- Line 20b, rent or lease of other business property
- 20b is other business property, so the yard you rent to park the machine is 20b while the machine itself is 20a.
- Form 4562, form 4562, carried to schedule c line 13
- A rent to own or capital lease that transfers ownership is a purchase in substance, so the asset is capitalised and recovered on Form 4562 rather than deducted as rent.
- Part III line 38, part iii line 38, materials and supplies
- If the inventory rules apply to you and the hire is a direct cost of producing goods you sell, its cost belongs in Part III rather than on 20a.
Examples that belong on line 20a
- $320 for a two day scissor lift hire from United Rentals
- $95 a day for a concrete saw
- $180 for a weekend floor sander hire
- $1,400 for a month of excavator hire on one project
- $60 for a carpet cleaner rented for a turnover clean
What does not belong here
- Fuel and consumables bought for the rented machine, which are supplies or car and truck costs.
- A rent to own agreement that is really a purchase.
- Hire of a machine used on a personal project at home.
The limit that applies
Only the business portion is deductible if a hired machine was also used on a personal project.
What to keep
Keep the rental agreements and invoices, which show the dates and the machine. Noting the job each hire was for ties the cost to the work it supported.
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 |
| a rented dedicated server | Schedule C, Line 20a |
| car lease payments | Schedule C, Line 20a |
Related lookups
- Where does office rent go on Schedule C?
- Where does a website build go on Schedule C?
- Where do print on demand supplies go?
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 equipment and tool rental lands on Line 20a without you sorting it.
Start for free