How-to · Schedule C
Schedule C expense categories for your bank and card transactions
Schedule C (Form 1040) is where a sole proprietor or a single-member LLC taxed as a sole proprietorship (the default for one owner) reports business income and expenses. Pennyrow suggests a Schedule C line for each merchant in your statements. You confirm or change every suggestion, and it totals the year as a profit and loss summary of book totals. Line references are for organizing; your return preparer decides.
Business or personal comes first
A shared account can't be sorted by line until you decide what counts. On the Catch-up tab set each account to Business (everything in it is for the business), Personal (nothing is), or Both for an account you share. Rows in a business account count in the profit and loss. In a Both account you choose merchant by merchant on the Categorize tab.
The lines Pennyrow uses
These follow Schedule C (Form 1040) for tax year 2025, checked against the IRS instructions on October 22, 2026. The form changes from year to year, so check the numbers against the form for your year.
| Line | Name |
|---|---|
| 1 | Gross receipts or sales |
| 8 | Advertising |
| 9 | Car and truck expenses |
| 10 | Commissions and fees |
| 11 | Contract labor |
| 15 | Insurance (other than health) |
| 16b | Interest (other) |
| 17 | Legal and professional services |
| 18 | Office expense |
| 20a | Rent or lease: vehicles, machinery, equipment |
| 20b | Rent or lease: other business property |
| 21 | Repairs and maintenance |
| 22 | Supplies |
| 23 | Taxes and licenses |
| 24a | Travel |
| 24b | Meals (24b, before any limit) |
| 25 | Utilities |
| 26 | Wages |
| 27b | Other expenses |
Six buckets are not Schedule C lines: Owner draw / personal, Owner contribution, Loan payment, Tax payment (ask your preparer), Refund or return, and Uncategorized (ask your preparer). Money in the first four is listed apart from income and expenses, a refund shows as a negative expense, and uncategorized money is counted as income or expense until you decide, with the number of rows still unconfirmed shown in the summary.
Pennyrow doesn't work out depreciation, a home office, car mileage, self-employment tax, the limit on meals or the qualified business income deduction. Those are for you and your preparer.
How the suggestions work
- Pennyrow reads the merchant text on each row, such as “PIXELMOTH ADVERTISING” or an electric company, and suggests a line. Each suggestion is marked “Likely” or “Rough guess”. With nothing to go on it says “No suggestion” and leaves the row as Uncategorized.
- Every suggestion shows “Suggested. You decide. Not tax advice.” until you confirm it.
- You confirm one merchant at a time with the Confirm button. There is no confirm-all, and the choice applies to every row from that merchant.
- Exports show the status of each row in the Category status column (“suggested” or “confirmed”), so a number you haven't confirmed is never mistaken for one you have.
What the summary shows
The Summary tab lists income and expenses by line, the net for the year as book totals, and a separate section for what is not part of profit: transfers between your accounts, card payments, loan and tax payments, owner draws and possible transfers you haven't decided. Amounts that still rest on a suggestion are labelled “not yet confirmed”.
Worked example from the built-in sample
These are Pennyrow's suggestions for five merchants in the built-in sample, before anyone confirms anything. The merchants are made up.
| Suggested line | Merchant | Rows | Total |
|---|---|---|---|
| Line 8 · Advertising | PIXELMOTH ADVERTISING | 11 | $1,754.06 |
| Line 15 · Insurance (other than health) | CINDERPEAK BUSINESS INSURANCE | 11 | $979.00 |
| Line 20b · Rent or lease: other business property | FERNMOOR COWORK RENT | 11 | $4,950.00 |
| Line 25 · Utilities | MARSHWICK ELECTRIC CO | 11 | $986.66 |
| Line 27b · Other expenses | MONTHLY SERVICE FEE | 11 | $132.00 |
Everything it can't place goes to “Uncategorized: ask your preparer”. In the sample that is 24 merchants to confirm, which is a list you can work through in one sitting.
Questions
Is this tax advice, and can I file from it?
No. Pennyrow gives suggested lines and book totals to help you organize. Line references are for organizing and your return preparer decides what goes on a return.
Why is a merchant “Uncategorized: ask your preparer”?
Pennyrow had nothing to go on, or the merchant could be several things. Money in counts as income and money out as expense until you decide, and the summary says how many rows are not yet confirmed.
What does “Meals (24b, before any limit)” mean?
Pennyrow puts meal spending on line 24b and never applies a limit. How much of it counts is for you and your preparer.
Which year's Schedule C does it follow?
The line numbers follow the 2025 form. The form can change from year to year, so check them against the form for the year you are filing.
Can I use it if my business isn't a sole proprietorship?
Schedule C is the form for a sole proprietor or a single-member LLC that is taxed that way, and the categories follow it. Other kinds of business file different forms, so ask your preparer first.
Related
- How to catch up on a year of bookkeeping yourself
- How to find the payees you may need to send a 1099-NEC, from your bank statements
- Convert an OFX or QFX file to CSV or Excel
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Checked October 22, 2026 against IRS: Instructions for Schedule C (Form 1040). Pages move; if something has changed, the source has the current version.