Office rent belongs on Line 20b, rent or lease of other business property.
Why line 20b
Line 20 is split in two and real property goes in the second half. 20a is rent or lease of vehicles, machinery and equipment, 20b is other business property, which is where rent for an office, a suite or a floor belongs. Rent is deductible for the period it covers, so prepaying a long stretch does not pull the whole deduction forward once the prepayment reaches past the next tax year.
On the printed form this is line 20b. 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 office rent lands on Line 20b without you sorting it.
Start for freeWhat office rent is confused with
- Line 20a, rent or lease of vehicles, machinery and equipment
- 20a is vehicles, machinery and equipment, so the leased copier inside the office is 20a while the office itself is 20b.
- Line 30, line 30, business use of your home
- If the space is part of your own home rather than separate premises, there is no 20b rent deduction and the cost runs through the business use of home rules on line 30.
- Schedule E, schedule e, rental real estate
- Rent you receive from a tenant is rental income on Schedule E, while rent you pay to occupy space for your trade is a Schedule C expense.
Examples that belong on line 20b
- $1,850 a month for a two room office suite
- $22,200 of annual rent on a storefront leased in the business name
- $450 a month for one private office inside a shared building
- $600 common area maintenance charge billed on top of base rent
What does not belong here
- A security deposit, which is not an expense until it is applied or forfeited.
- Rent for space used personally.
- Payments on a lease that is really a purchase, which are capitalised and depreciated.
The limit that applies
Deposits are not rent. They stay on the books until the landlord applies or keeps them.
What to keep
Keep the signed lease, the landlord's rent invoices or ledger, and the bank records showing payment. If the lease is in your personal name but the business occupies the space, put the business use in writing.
Other expenses on line 20b
| Expense | Line |
|---|---|
| a coworking membership | Schedule C, Line 20b |
| a storage unit rental | Schedule C, Line 20b |
| event or venue hire | Schedule C, Line 20b |
| studio or workshop rent | Schedule C, Line 20b |
| warehouse rent | Schedule C, Line 20b |
Related lookups
- Where do car lease payments go on Schedule C?
- Can I deduct homeowners insurance for an office?
- Do rental property expenses 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 office rent lands on Line 20b without you sorting it.
Start for free