Business Taxes and Licenses Go on Schedule C Line 23
Schedule C is the tax form you fill out for your business. You put business taxes and yearly business licenses on line 23, which the form calls "Taxes and licenses." That includes a city business license, property tax on your business equipment, and payroll taxes you pay as an employer. Your income tax stays off Schedule C.
What goes on line 23, "Taxes and licenses"
- A yearly business license or permit from your city, county, or state
- Property tax on your shop, equipment, or other business property
- Sales tax on your own sales, in states that charge it to the seller
- Social Security, Medicare, and unemployment taxes you pay for your employees
- Federal highway use tax, a yearly tax on the heaviest trucks
What goes on a different line
- Car registration and license plates Line 9, with your other car costs
- Sales tax you paid on something you bought The same line as what you bought
- Half of your self-employment tax, the Social Security and Medicare on your own profit Schedule 1, another page of your tax return
- Property tax on your home Schedule A, your personal write-offs page
What you can't write off
- Federal income tax, including the tax payments you send the IRS during the year
Updated by Doug, owner of Shoeboxed. Rules from the IRS Schedule C instructions.
Costs that go on a different line
Car registration goes with your car costs on line 9
Your car's registration and license plates count as car costs.
- If you add up your real car bills, like gas, repairs, and insurance, the business share of the registration goes on line 9.
- If you use the IRS rate per mile, the rate covers the registration fee.
Some states add a tax based on your car's value to the registration bill. The business share of that tax goes on line 23, even if you use the IRS rate per mile. Our IRS mileage rate calculator shows what your business miles are worth.
Sales tax on a purchase goes on the same line as what you bought
Sales tax you pay when you buy something for your business counts as part of its price. Sales tax on printer ink goes on line 18 with the ink. Sales tax on a new truck counts as part of the truck's price, and your tax preparer writes it off with the truck.
Half of your self-employment tax goes on Schedule 1
Self-employment tax is the Social Security and Medicare you pay on your business profit. It stays off Schedule C. You write off half of it on Schedule 1, line 15, another page of your tax return.
Property tax on your home goes on Schedule A
Property tax on your home is personal. It goes on Schedule A, the page for personal write-offs, if you itemize. Itemizing means you list your write-offs there instead of taking the standard deduction, the flat amount most people take. If you have a home office and your tax preparer figures it on IRS Form 8829, the office's share goes on line 30.
Federal income tax is not a write-off
The IRS says to leave federal income tax off Schedule C. You may send the IRS tax payments during the year, called estimated payments. They pay your income tax and self-employment tax early, so they stay off Schedule C too. State income tax goes on Schedule A, if you itemize.
Sales tax goes on line 23 only in states that charge it to the seller
States handle sales tax one of two ways. Your tax preparer or your state's tax office can tell you which way yours does it.
- If your state charges the sales tax to you, the seller, count the sales tax your customers paid you as part of your sales on line 1. Then write off what you paid the state on line 23.
- If your state charges the sales tax to your customer, leave it off line 1 and off line 23. You only collected it and sent it in.
Sales tax you pay when you buy something for your business is different. It goes on the same line as what you bought.
Paid a yearly license or fee to your city or state? It goes on line 23
The licenses and fees your state or city charges each year for your business go on line 23. That can be a city business license or a contractor's license. A license that lasts for years, like a liquor license, may have to be written off a little each year instead. Your tax preparer handles that part.
Where 5 common tax and license payments go on Schedule C
Say you run a moving business with one truck and one employee. Here is what you paid in 2026. The amounts are an example.
| What you paid in 2026 | Cost | Where it goes on Schedule C |
|---|---|---|
| City business license | $150 | Line 23, Taxes and licenses |
| Your share of your employee's Social Security and Medicare | $2,300 | Line 23, Taxes and licenses |
| Federal unemployment tax for your employee | $42 | Line 23, Taxes and licenses |
| Registration on the moving truck | $300 | Line 9, if you add up your real truck bills |
| Tax payments you sent the IRS during the year | $8,000 | Not a write-off |
Line 23 gets $2,492 for the license and the two employer taxes. The truck's registration goes on line 9 with your other truck bills. The tax payments to the IRS stay off Schedule C.
Car registration at the DMV goes on line 9, not line 23
363 Shoeboxed customers had a receipt from the DMV or another vehicle registration office from November 2025 to October 2026, more than any other office we counted. 259 had one from a state tax office or the state office where you register a business, and 139 had one from the IRS.
A car registration goes on line 9 when you add up your real car bills. A payment to the IRS for your income tax is not a write-off. A receipt from your state can be a license fee for line 23, or state income tax for Schedule A. Type what you paid for, like "car registration" or "business license," in the box near the top of this page.
Shoeboxed tax and license receipts, November 2025 to October 2026
1,890
tax and license receipts
611
Shoeboxed customers who saved them
$208
for a typical receipt. Half cost more, and half cost less.
Shoeboxed customers with each kind of office
The DMV is first. A car registration goes on line 9, with your other car costs.
- The DMV and other vehicle registration offices 363
- State tax and business registration offices 259
- The IRS 139
The 3 kinds of tax and license offices with the most Shoeboxed customers
| Who they paid | Customers | Receipts | Typical receipt | Half of receipts cost between |
|---|---|---|---|---|
| The DMV and other vehicle registration offices | 363 | 915 | $189 | $67 and $415 |
| State tax and business registration offices | 259 | 636 | $154 | $50 and $638 |
| The IRS | 139 | 348 | $1,278 | $300 and $7,300 |
Shoeboxed counted the receipts customers uploaded from November 1, 2025, to October 31, 2026, from the DMV and other vehicle registration offices, from state tax offices and the state offices where you register a business, and from the IRS. We matched each one by the name on the receipt, in any Shoeboxed category. City and county offices are left out. Some receipts showed no total, so the dollar amounts leave those out.
Keep each tax and license receipt for 3 years after you file
The IRS wants a record of each write-off, and in most cases you keep it for 3 years after you file. Keep each license, each city or state receipt, and your payroll tax records.
Snap each paper receipt with the Shoeboxed app, and forward the ones that come by email. Our software reads who you paid, the date, and the total, and we keep each one for as long as you have an account. When tax time comes, export the list or invite your bookkeeper or tax preparer in to see it.
Every Shoeboxed plan comes with a 30-day, 100% money-back guarantee. See the plans.
6 common questions about taxes and licenses on Schedule C
Line 23, "Taxes and licenses," is for taxes and fees your business pays, like a yearly business license, property tax on business property, and your share of payroll taxes as an employer. Federal income tax and self-employment tax stay off Schedule C. You write off half of your self-employment tax on Schedule 1, another page of your tax return.
Keep every receipt for your business in one place with Shoeboxed
Snap them with the app, forward the ones that come by email, or mail the paper ones to us in a Magic Envelope, and we scan them. We keep them all, ready for your accountant.
See how Shoeboxed keeps your receipts