Warehouse rent belongs on Line 20b, rent or lease of other business property.
Why line 20b
A warehouse or fulfilment unit is business property you rent, so it is line 20b, not 20a. That it holds inventory does not turn the rent into a cost of goods: a small business taxpayer under the gross receipts test deducts warehouse rent currently. Racking, forklifts and pallet trucks hired for the same unit are equipment, so those payments go on 20a.
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 warehouse rent lands on Line 20b without you sorting it.
Start for freeWhat warehouse rent is confused with
- Line 20a, rent or lease of vehicles, machinery and equipment
- Forklift, racking and pallet truck hire is machinery and equipment rent on 20a, while the floor space itself is 20b.
- Part III line 39, part iii line 39, other costs
- A business large enough to be caught by the uniform capitalisation rules has to roll certain storage costs into inventory in Part III, while a small business taxpayer under the gross receipts test deducts the rent on 20b.
Examples that belong on line 20b
- $2,600 a month for 3,000 square feet of warehouse space
- $780 a month for a racked storage bay on a shared lease
- $1,100 a month of unit rent plus $140 of pallet racking hire reported on 20a
- $18,000 of annual rent on a fulfilment unit
What does not belong here
- Forklift and racking hire, which is equipment rent on 20a.
- A deposit held against the unit.
- Inbound freight from the carrier, which is added to the cost of the goods.
What to keep
Keep the lease, the landlord's invoices and any schedule of service charges. If the same invoice covers rent and equipment hire, ask for them itemised so the 20a and 20b split is on the document.
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 |
| office rent | Schedule C, Line 20b |
| studio or workshop rent | Schedule C, Line 20b |
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 warehouse rent lands on Line 20b without you sorting it.
Start for free