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Page 1 of 9 of 2003 Instructions for Schedule C 17:16 - 22-OCT-2003

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Department of the Treasury

Internal Revenue Service

2003 Instructions for Schedule C

Use Schedule C (Form 1040) to report income or loss from a business you operated or a
Profit or Loss profession you practiced as a sole proprietor. Also, use Schedule C to report wages and
expenses you had as a statutory employee. An activity qualifies as a business if your
From Business primary purpose for engaging in the activity is for income or profit and you are involved
in the activity with continuity and regularity. For example, a sporadic activity or a
hobby does not qualify as a business. To report income from a nonbusiness activity, see
the instructions for Form 1040, line 21.
Small businesses and statutory employees with expenses of $2,500 or less may be
able to file Schedule C-EZ instead of Schedule C. See Schedule C-EZ for details.
You may be subject to state and local taxes and other requirements such as business
licenses and fees. Check with your state and local governments for more information.
Section references are to the Internal Revenue Code.

and share in the profits and losses, you General Instructions for Forms 1099,
General Instructions are partners in a partnership, whether or
not you have a formal partnership agree-
1098, 5498, and W-2G.

A Change To Note ment. Do not use Schedule C or C-EZ. If you received cash of more than
Instead, file Form 1065. See Pub. 541 $10,000 in one or more related transac-
Contract labor is now reported on line 11 for more details. tions in your trade or business, you may
and bad debts are now reported in have to file Form 8300. For details, see
Part V. Exception. If you and your spouse Pub. 1544.
wholly own an unincorporated business
Other Schedules and Forms as community property under the com-
Reportable Transaction
You May Have To File munity property laws of a state, foreign
• Schedule A to deduct interest, taxes, country, or U.S. possession, you may Disclosure Statement
treat the business either as a sole proprie- Use Form 8886 to disclose information
and casualty losses not related to your torship or a partnership. The only states
business. for each reportable transaction in which
with community property laws are Ari-
• Schedule E to report rental real es- zona, California, Idaho, Louisiana, Ne-
you participated. Form 8886 must be
filed for each tax year that your Federal
tate and royalty income or (loss) that is vada, New Mexico, Texas, Washington,
not subject to self-employment tax. income tax liability is affected by your
and Wisconsin. A change in your report- participation in the transaction. The fol-
• Schedule F to report profit or (loss) ing position will be treated as a conver- lowing are reportable transactions.
sion of the entity.
from farming.
• Any transaction that is the same as
• Schedule SE to pay self-employ- S in g le-M e mbe r L imite d L iability or substantially similar to tax avoidance
ment tax on income from any trade or Company (LLC). Generally, a transactions identified by the IRS.
business. single-member domestic LLC is not • Any transaction offered under condi-
• Form 4562 to claim depreciation on treated as a separate entity for Federal in- tions of confidentiality.
assets placed in service in 2003, to claim
amortization that began in 2003, to make
come tax purposes. If you are the sole • Any transaction for which you have
member of a domestic LLC, file Sched- contractual protection against disallow-
an election under section 179 to expense ule C or C-EZ (or Schedule E or F, if ap-
certain property, or to report information ance of the tax benefits.
on listed property.
plicable). However, you may elect to
treat a domestic LLC as a corporation. • Any transaction resulting in a loss of
• Form 4684 to report a casualty or See Form 8832 for details on the elec- at least $2 million in any single tax year
or $4 million in any combination of tax
theft gain or loss involving property used tion and the tax treatment of a foreign
in your trade or business or income-pro- LLC. years. (At least $50,000 for a single tax
ducing property. year if the loss arose from a foreign cur-
rency transaction defined in section
• Form 4797 to report sales, ex- Heavy Highway Vehicle Use Tax. If you
use certain highway trucks, truck-trailers, 988(c)(1), whether or not the loss flows
changes, and involuntary conversions (not through from an S corporation or partner-
from a casualty or theft) of trade or busi- tractor-trailers, or buses in your trade or
business, you may have to pay a Federal ship.)
ness property.
highway motor vehicle use tax. See the • Any transaction resulting in a
• Form 8271 if you are claiming or Instructions for Form 2290 to find out book-tax difference of more than $10
reporting on Schedule C or C-EZ any in- if you owe this tax. million on a gross basis.
come, deduction, loss, credit, or other tax
benefit from a tax shelter. • Any transaction resulting in a tax
Information Returns. You may have to credit of more than $250,000, if you held
• Form 8594 to report certain file information returns for wages paid to the asset generating the credit for 45 days
purchases or sales of groups of assets that employees, certain payments of fees and or less.
constitute a trade or business. other nonemployee compensation, inter-
• Form 8824 to report like-kind ex- est, rents, royalties, real estate transac- See the Instructions for Form 8886 for
changes. tions, annuities, and pensions. You may more details and exceptions.
• Form 8829 to claim expenses for also have to file an information return if
you sold $5,000 or more of consumer
business use of your home. products to a person on a buy-sell, Additional Information
Husband-Wife Business. If you and your deposit-commission, or other similar ba- See Pub. 334 for more information for
spouse jointly own and operate a business sis for resale. For details, see the 2003 small businesses.
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the close of the year, it may not be de- work does not matter. However, work is
Specific Instructions ductible or may be deductible only in
part for the year of the payment. See
not treated as participation if it is work
that an owner would not customarily do
Pub. 535. in the same type of activity and one of
Filers of Form 1041. Do not complete your main reasons for doing the work
the block labeled “Social security num- If you use the accrual method, report
ber.” Instead, enter your employer identi- income when you earn it and deduct ex- was to avoid the disallowance of losses
fication number (EIN) on line D. penses when you incur them even if you or credits from the activity under the pas-
do not pay them during the tax year. sive activity rules.
Accrual-basis taxpayers are put on a cash Work you did as an investor in an ac-
basis for deducting business expenses
Line A owed to a related cash-basis taxpayer. tivity is not treated as participation unless
you were directly involved in the
Describe the business or professional ac- Other rules determine the timing of de-
ductions based on economic performance. day-to-day management or operations of
tivity that provided your principal source the activity. Work done as an investor in-
of income reported on line 1. If you See Pub. 538.
cludes:
owned more than one business, you must To change your accounting method,
complete a separate Schedule C for each you generally must file Form 3115. You 1. Studying and reviewing financial
business. Give the general field or activ- may also have to make an adjustment to statements or reports on the activity,
ity and the type of product or service. If prevent amounts of income or expense 2. Preparing or compiling summaries
your general field or activity is wholesale from being duplicated or omitted. This is or analyses of the finances or operations
or retail trade, or services connected with called a section 481(a) adjustment. of the activity for your own use, and
production services (mining, construction, Example. You change to the cash 3. Monitoring the finances or opera-
or manufacturing), also give the type of method of accounting and choose to ac- tions of the activity in a nonmanagerial
customer or client. For example, “whole- count for inventoriable items in the same capacity.
sale sale of hardware to retailers” or “ap- manner as materials and supplies that are
praisal of real estate for lending not incidental. You accrued sales in 2002 Participation by your spouse during
institutions.” for which you received payment in 2003. the tax year in an activity you own can
You must report those sales in both years be counted as your participation in the
as a result of changing your accounting activity. This applies even if your spouse
method and must make a section 481(a)
Line D adjustment to prevent duplication of in-
did not own an interest in the activity and
whether or not you and your spouse file a
You need an EIN only if you had a qual- come. joint return.
ified retirement plan or were required to A net negative section 481(a) adjust-
file an employment, excise, estate, trust, ment is taken into account entirely in the For purposes of the passive activity
or alcohol, tobacco, and firearms tax re- year of the change. A net positive section rules, you materially participated in the
turn. If you need an EIN, file Form 481(a) adjustment is generally taken into operation of this trade or business activity
SS-4. If you do not have an EIN, leave account over a period of 4 years. Include during 2003 if you met any of the fol-
line D blank. Do not enter your SSN. any net positive section 481(a) adjust- lowing seven tests.
ments on line 6. If the net section 481(a) 1. You participated in the activity for
adjustment is negative, report it in Part more than 500 hours during the tax year.
Line E V.
2. Your participation in the activity for
Enter your business address. Show a For details on figuring section 481(a) the tax year was substantially all of the
street address instead of a box number. adjustments, see Rev. Proc. 2002-9, Rev. participation in the activity of all individ-
Include the suite or room number, if any. Proc. 2002-19, and Rev. Proc. 2002-54. uals (including individuals who did not
You can find Rev. Proc. 2002-9 on page own any interest in the activity) for the
If you conducted the business from your 327 of Internal Revenue Bulletin 2002-3
home located at the address shown on tax year.
at www.irs.gov/pub/irs-irbs/irb02-03.pdf,
Form 1040, page 1, you do not have to Rev. Proc. 2002-19 on page 696 of Inter- 3. You participated in the activity for
complete this line. nal Revenue Bulletin 2002-13 at more than 100 hours during the tax year,
www.irs.gov/pub/irs-irbs/irb02-13.pdf, and you participated at least as much as
and Rev. Proc. 2002-54 on page 432 of any other person for the tax year. This
includes individuals who did not own any
Line F Internal Revenue Bulletin 2002-35 at
www.irs.gov/pub/irs-irbs/irb02-35.pdf. interest in the activity.
Generally, you can use the cash method, 4. The activity is a significant partici-
accrual method, or any other method per- pation activity for the tax year, and you
mitted by the Internal Revenue Code. In participated in all significant participation
all cases, the method used must clearly Line G activities for more than 500 hours during
reflect income. Unless you are a qualify- If your business activity was not a rental the year. An activity is a “significant par-
ing taxpayer or a qualifying small busi- activity and you met any of the material ticipation activity” if it involves the con-
ness taxpayer, you must use the accrual participation tests below or the exception duct of a trade or business, you
method for sales and purchases of inven- for oil and gas applies (explained on page participated in the activity for more than
tory items. See the Part III instructions C-3), check the “Yes” box. Otherwise, 100 hours during the tax year, and you
on page C-6 for the definition of a quali- check the “No” box. If you check the did not materially participate under any
fying taxpayer and a qualifying small “No” box, this business is a passive ac- of the material participation tests (other
business taxpayer. Special rules apply to tivity. If you have a loss from this busi- than this test 4).
long-term contracts. See section 460 for ness, see Limit on Losses on page C-3. 5. You materially participated in the
details. If you have a profit from this business activity for any 5 of the prior 10 tax
If you use the cash method, show all activity but have current year losses from years.
items of taxable income actually or con- other passive activities or you have prior 6. The activity is a personal service
structively received during the year (in year unallowed passive activity losses, activity in which you materially partici-
cash, property, or services). Income is see the Instructions for Form 8582. pated for any 3 prior tax years. A per-
constructively received when it is Material Participation. Participation, for sonal service activity is an activity that
credited to your account or set aside for purposes of the seven material partici- involves performing personal services in
you to use. Also, show amounts actually pation tests listed below, generally in- the fields of health, law, engineering, ar-
paid during the year for deductible ex- cludes any work you did in connection chitecture, accounting, actuarial science,
penses. However, if the payment of an with an activity if you owned an interest performing arts, consulting, or any other
expenditure creates an asset having a use- in the activity at the time you did the trade or business in which capital is not a
ful life that extends substantially beyond work. The capacity in which you did the material income-producing factor.
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7. Based on all the facts and circum- your trade or business that were properly or less on leased listed property (other than
stances, you participated in the activity shown on Forms 1099-MISC. If the total a vehicle), include on this line any inclu-
on a regular, continuous, and substantial amounts that were reported in box 7 of sion amount. See Pub. 946 to figure the
basis during the tax year. But you do not Forms 1099-MISC are more than the total amount.
meet this test if you participated in the you are reporting on line 1, attach a state-
activity for 100 hours or less during the ment explaining the difference.
tax year. Your participation in managing Statutory Employees. If you received a
the activity does not count in determining
if you meet this test if any person (except
Form W-2 and the “Statutory employee”
box in box 13 of that form was checked,
Part II. Expenses
you) (a) received compensation for per- report your income and expenses related to Capitalizing Costs of Property. If you pro-
forming management services in connec- that income on Schedule C or C-EZ. Enter
tion with the activity or (b) spent more duced real or tangible personal property or
your statutory employee income from box acquired property for resale, certain ex-
hours during the tax year than you spent 1 of Form W-2 on line 1 of Schedule C or
performing management services in con- penses attributable to the property gener-
C-EZ and check the box on that line. So- ally must be included in inventory costs or
nection with the activity (regardless of cial security and Medicare tax should have
whether the person was compensated for been withheld from your earnings; there- capitalized. In addition to direct costs, pro-
the services). fore, you do not owe self-employment tax ducers of inventory property generally
on these earnings. Statutory employees in- must also include part of certain indirect
Rental of Personal Property. A rental ac- clude full-time life insurance agents, cer- costs in their inventory. Purchasers of per-
tivity (such as long-term equipment leas- tain agent or commission drivers and sonal property acquired for resale must in-
ing) is a passive activity even if you traveling salespersons, and certain home- clude part of certain indirect costs in
materially participated in the activity. workers. inventory only if the average annual gross
However, if you met any of the five ex- receipts for the 3 prior tax years exceed $10
ceptions listed under Rental Activities in If you had both self-employment in-
the Instructions for Form 8582, the rental come and statutory employee income, you million. Also, you must capitalize part of
of the property is not treated as a rental must file two Schedules C. You cannot use the indirect costs that benefit real or tangi-
activity and the material participation Schedule C-EZ or combine these amounts ble personal property constructed for use in
rules above apply. on a single Schedule C. a trade or business, or noninventory prop-
Installment Sales. Generally, the install- erty produced for sale to customers. Re-
Exception for Oil and Gas. If you are fil- ment method may not be used to report duce the amounts on lines 8 – 26 and Part V
ing Schedule C to report income and de- income from the sale of (a) personal prop- by amounts capitalized. For details, see
ductions from an oil or gas well in which erty regularly sold under the installment Pub. 538.
you own a working interest directly or method or (b) real property held for resale
through an entity that does not limit your to customers. But the installment method Exception for Certain Producers. Produc-
liability, check the “Yes” box. The activ- may be used to report income from sales of ers who account for inventoriable items in
ity of owning the working interest is not certain residential lots and timeshares if
a passive activity regardless of your par- the same manner as materials and supplies
you elect to pay interest on the tax due on that are not incidental may currently deduct
ticipation. that income after the year of sale. See sec- expenditures for direct labor and all indi-
Limit on Losses. If you checked the tion 453(l)(2)(B) for details. If you make
this election, include the interest on Form rect costs that would otherwise be included
“No” box and you have a loss from this in inventory costs. See Cost of Goods Sold
business, you may have to use Form 1040, line 60. Also, enter “453(l)(3)” and
the amount of the interest on the dotted line on page C-6 for more details.
8582 to figure your allowable loss, if
any, to enter on Schedule C, line 31. to the left of line 60.
Exception for Creative Property. If you
Generally, you can deduct losses from If you use the installment method, at- are an artist, author, or photographer, you
passive activities only to the extent of in- tach a schedule to your return. Show sepa- may be exempt from the capitalization
come from passive activities. For details, rately for 2003 and the 3 preceding years:
gross sales, cost of goods sold, gross profit, rules. However, your personal efforts must
see Pub. 925.
percentage of gross profit to gross sales, have created (or reasonably be expected to
amounts collected, and gross profit on create) the property. This exception does
amounts collected. not apply to any expense related to printing,
Line H photographic plates, motion picture films,
If you started or acquired this business in video tapes, or similar items. These ex-
2003, check the box on line H. Also penses are subject to the capitalization
check the box if you are reopening or re- Line 6 rules. For details, see Pub. 538.
starting this business after temporarily Report on line 6 amounts from finance re-
closing it, and you did not file a 2002 serve income, scrap sales, bad debts you
Schedule C or C-EZ for this business. recovered, interest (such as on notes and
accounts receivable), state gasoline or fuel Line 9
tax refunds you got in 2003, credit for Fed- You can deduct the actual expenses of run-
eral tax paid on gasoline or other fuels ning your car or truck or take the standard
claimed on your 2002 Form 1040, prizes mileage rate. You must use actual ex-
Part I. Income and awards related to your trade or busi- penses if you used your vehicle for hire
Except as otherwise provided in the Inter- ness, and other kinds of miscellaneous (such as a taxicab) or you used more than
business income. Include amounts you re- one vehicle simultaneously in your busi-
nal Revenue Code, gross income includes ceived in your trade or business as shown
income from whatever source derived. ness (such as in fleet operations). You can-
on Form 1099-PATR. Also, include any not use actual expenses for a leased vehicle
Gross income, however, does not include recapture of the deduction for clean-fuel if you previously used the standard mileage
extraterritorial income that is qualifying vehicles used in your business and rate for that vehicle.
foreign trade income. Use Form 8873 to clean-fuel vehicle refueling property. For
figure the extraterritorial income exclusion. details, see Pub. 535. You can take the standard mileage rate
Report it on Schedule C as explained in the If the business use percentage of any for 2003 only if you:
Instructions for Form 8873. listed property (defined in the instructions • Owned the vehicle and use the stan-
for line 13 on page C-4) decreased to 50% dard mileage rate for the first year you
or less in 2003, report on this line any re- placed the vehicle in service or
Line 1 capture of excess depreciation, including • Leased the vehicle and are using the
any section 179 expense deduction. Use standard mileage rate for the entire lease
Enter gross receipts from your trade or Form 4797 to figure the recapture. Also, if period (except the period, if any, before
business. Include amounts you received in the business use percentage drops to 50% 1998).
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If you deduct actual expenses: When To Attach Form 4562. You must earnings due to sickness or disability. For
• Include on line 9 the business portion complete and attach Form 4562 only if: details, see Pub. 535.
of expenses for gasoline, oil, repairs, insur- • You are claiming depreciation on
ance, tires, license plates, etc., and property placed in service during 2003;
• Show depreciation on line 13 and rent • You are claiming depreciation on Lines 16a and 16b
or lease payments on line 20a. listed property (defined below), regardless
of the date it was placed in service; or Interest Allocation Rules. The tax treat-
If you take the standard mileage rate,
multiply the number of business miles by • You are claiming a section 179 ex- ment of interest expense differs depending
on its type. For example, home mortgage
36 cents. Add to this amount your parking pense deduction. interest and investment interest are treated
fees and tolls, and enter the total on line 9. If you acquired depreciable property for differently. “Interest allocation” rules re-
Do not deduct depreciation, rent or lease the first time in 2003, see Pub. 946. quire you to allocate (classify) your interest
payments, or your actual operating ex- Listed property generally includes, but expense so it is deducted (or capitalized) on
penses. is not limited to: the correct line of your return and receives
the right tax treatment. These rules could
For details, see Pub. 463. • Passenger automobiles weighing affect how much interest you are allowed to
6,000 pounds or less; deduct on Schedule C or C-EZ.
Information on Your Vehicle. If you claim
any car and truck expenses, you must pro- • Any other property used for transpor- Generally, you allocate interest expense
vide certain information on the use of your tation if the nature of the property lends
itself to personal use, such as motorcycles, by tracing how the proceeds of the loan
vehicle by completing one of the following. were used. See Pub. 535 for details.
pickup trucks, etc.;
• Part IV of Schedule C or Part III of
Schedule C-EZ if: (a) you are claiming the • Any property used for entertainment If you paid interest on a debt secured by
or recreational purposes (such as photo- your main home and any of the proceeds
standard mileage rate, you lease your vehi- from that debt were used in connection
cle, or your vehicle is fully depreciated and graphic, phonographic, communication,
and video recording equipment); with your trade or business, see Pub. 535 to
(b) you are not required to file Form 4562
for any other reason. If you used more than • Cellular telephones or other similar figure the amount that is deductible on
Schedule C or C-EZ.
one vehicle during the year, attach your telecommunications equipment; and
own schedule with the information re- • Computers or peripheral equipment. How To Report. If you have a mortgage on
quested in Part IV of Schedule C, or Part III real property used in your business (other
of Schedule C-EZ, for each additional vehi- Exceptions. Listed property does not in- than your main home), enter on line 16a the
cle. clude photographic, phonographic, com- interest you paid for 2003 to banks or other
munication, or video equipment used
• Part V of Form 4562 if you are claim- exclusively in your trade or business or at
financial institutions for which you re-
ceived a Form 1098 (or similar statement).
ing depreciation on your vehicle or you are your regular business establishment. It also
required to file Form 4562 for any other If you did not receive a Form 1098, enter
does not include any computer or periph- the interest on line 16b.
reason (see the instructions for line 13). eral equipment used exclusively at a regu-
lar business establishment and owned or If you paid more mortgage interest than
leased by the person operating the estab- is shown on Form 1098, see Pub. 535 to
lishment. For purposes of these exceptions, find out if you can deduct the additional
Line 11 a portion of your home is treated as a regu- interest. If you can, include the amount on
lar business establishment only if that por- line 16a. Attach a statement to your return
Enter the total cost of contract labor for the explaining the difference and enter “See
tax year. Do not include contract labor de- tion meets the requirements under section
280A(c)(1) for deducting expenses for the attached” in the margin next to line 16a.
ducted elsewhere on your return such as
contract labor that you included in Part III. business use of your home. If you and at least one other person
See the instructions for line 6 on page (other than your spouse if you file a joint
Also, do not include salaries and wages return) were liable for and paid interest on
paid to your employees, instead see line 26. C-3 if the business use percentage of any
listed property decreased to 50% or less in the mortgage and the other person received
2003. the Form 1098, include your share of the
interest on line 16b. Attach a statement to
Line 12 your return showing the name and address
of the person who received the Form 1098.
Enter your deduction for depletion on this
line. If you have timber depletion, attach
Line 14 In the margin next to line 16b, enter “See
Deduct contributions to employee benefit attached.”
Form T. See Pub. 535 for details.
programs that are not an incidental part of a If you paid interest in 2003 that applies
pension or profit-sharing plan included on to future years, deduct only the part that
line 19. Examples are accident and health applies to 2003.
Line 13 plans, group-term life insurance, and de-
Depreciation and Section 179 Expense pendent care assistance programs.
Deduction. Depreciation is the annual de- Do not include on line 14 any contribu-
tions you made on your behalf as a self-em-
Line 17
duction allowed to recover the cost or other Include on this line fees for tax advice re-
basis of business or investment property ployed person to an accident and health
having a useful life substantially beyond plan or for group-term life insurance. You lated to your business and for preparation
the tax year. You can also depreciate im- may be able to deduct on Form 1040, line of the tax forms related to your business.
provements made to leased business prop- 29, the amount you paid for health insur-
erty. However, stock in trade, inventories, ance on behalf of yourself, your spouse,
and land are not depreciable. Depreciation
starts when you first use the property in
and dependents, even if you do not itemize
your deductions. See the instructions for
Line 19
your business or for the production of in- Form 1040, line 29, for details. Enter your deduction for contributions to a
come. It ends when you take the property pension, profit-sharing, or annuity plan, or
out of service, deduct all your depreciable plans for the benefit of your employees. If
cost or other basis, or no longer use the the plan included you as a self-employed
property in your business or for the produc- Line 15 person, enter contributions made as an em-
tion of income. You may also elect under Deduct premiums paid for business insur- ployer on your behalf on Form 1040, line
section 179 to expense part of the cost of ance on line 15. Deduct on line 14 amounts 30, not on Schedule C.
certain property you bought in 2003 for use paid for employee accident and health in- Generally, you must file the applicable
in your business. See the Instructions for surance. Do not deduct amounts credited to form listed below if you maintain a pen-
Form 4562 to figure the amount to enter on a reserve for self-insurance or premiums sion, profit-sharing, or other funded-de-
line 13. paid for a policy that pays for your lost ferred compensation plan. The filing
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requirement is not affected by whether or expenses only if you did not pay or incur
not the plan qualified under the Internal Line 23 meal expenses on a day you were traveling
Revenue Code, or whether or not you claim You can deduct the following taxes and away from your tax home. The amount of
a deduction for the current tax year. There licenses on this line. the deduction is $2 a day for the period
is a penalty for failure to timely file these
forms. • State and local sales taxes imposed on from January 1 through October 31, 2003,
and $3 a day for the period from November
you as the seller of goods or services. If 1 through December 31, 2003. Incidental
you collected this tax from the buyer, you expenses include fees and tips given to por-
Form 5500. File this form for a plan that is must also include the amount collected in
not a one-participant plan (see below). gross receipts or sales on line 1. ters, baggage carriers, bellhops, hotel
maids, stewards or stewardesses and others
• Real estate and personal property on ships, and hotel servants in foreign
Form 5500-EZ. File this form for a taxes on business assets. countries. They do not include expenses
one-participant plan. A one-participant • Licenses and regulatory fees for your for laundry, cleaning and pressing of cloth-
plan is a plan that only covers you (or you trade or business paid each year to state or ing, lodging taxes, or the costs of telegrams
and your spouse). local governments. But some licenses, such or telephone calls. You cannot use this
as liquor licenses, may have to be amor- method on any day that you use the stan-
For details, see Pub. 560. tized. See Pub. 535 for details. dard meal allowance (as explained in the
• Social security and Medicare taxes instructions for lines 24b and 24c).
paid to match required withholding from You cannot deduct expenses for attend-
your employees’ wages. Also, Federal un- ing a foreign convention unless it is directly
Lines 20a and 20b employment tax paid. Reduce your deduc- related to your trade or business and it is as
If you rented or leased vehicles, machinery, tion by the amount of the current year credit reasonable for the meeting to be held
or equipment, enter on line 20a the business shown on line 4 of Form 8846. outside the North American area as within
portion of your rental cost. But if you • Federal highway use tax. it. These rules apply to both employers and
leased a vehicle for a term of 30 days or employees. Other rules apply to luxury
more, you may have to reduce your deduc- Do not deduct the following on this line. water travel.
tion by an amount called the inclusion • Federal income taxes, including your For details, see Pub. 463.
amount. self-employment tax. However, you may
deduct one-half of your self-employment
You may have to do this if — tax on Form 1040, line 28.
• Estate and gift taxes. Lines 24b and 24c
And the vehicle’s • Taxes assessed to pay for improve- On line 24b, enter your total business meal
The lease fair market value on ments, such as paving and sewers. and entertainment expenses. Include meals
term began the first day of the • Taxes on your home or personal use expenses while traveling away from home
during ... lease exceeded ... property. for business. Instead of the actual cost of
2003 ........... . . . . . $18,000 • State and local sales taxes on property your meals while traveling away from
purchased for use in your business. Instead, home, you may use the standard meal al-
1999 through 2002 . . . . . . 15,500 treat these taxes as part of the cost of the lowance for your daily meals and inciden-
1997 or 1998 . . . . . . . . . . 15,800 property. tal expenses. Under this method, you
deduct a specified amount, depending on
1995 or 1996 . . . . . . . . . . 15,500 • State and local sales taxes imposed on where you travel, instead of keeping rec-
If the lease term began before 1995, see the buyer that you were required to collect ords of your actual meal expenses. How-
Pub. 463 to find out if you have an and pay over to state or local governments. ever, you must still keep records to prove
inclusion amount. These taxes are not included in gross re- the time, place, and business purpose of
ceipts or sales nor are they a deductible your travel.
expense. However, if the state or local gov-
ernment allowed you to retain any part of The standard meal allowance is the Fed-
See Pub. 463 to figure your inclusion the sales tax you collected, you must in- eral M&IE rate. You can find these rates on
amount. clude that amount as income on line 6. the Internet at www.policyworks.gov/
• Other taxes and license fees not re- perdiem. Click on 2003 Domestic Per
Diem Rates for the period January 1,
Enter on line 20b amounts paid to rent lated to your business.
2003 – September 30, 2003 and on 2004
or lease other property, such as office space Domestic Per Diem Rates for the period
in a building. October 1, 2003 – December 31, 2003. For
Line 24a locations outside the continental United
Enter your expenses for lodging and trans- States, the applicable rates are published
Line 21 portation connected with overnight travel monthly. You can find these rates on the
Internet at www.state.gov/m/a/als/prdm/
Deduct the cost of repairs and maintenance. for business while away from your tax 2003.
Include labor, supplies, and other items that home. Generally, your tax home is your
do not add to the value or increase the life main place of business regardless of where See Pub. 463 for details on how to fig-
of the property. Do not deduct the value of you maintain your family home. You can- ure your deduction using the standard meal
your own labor. Do not deduct amounts not deduct expenses paid or incurred in allowance, including special rules for par-
spent to restore or replace property; they connection with employment away from tial days of travel.
must be capitalized. home if that period of employment exceeds Business meal expenses are deductible
1 year. Also, you cannot deduct travel ex- only if they are (a) directly related to or
penses for your spouse, your dependent, or associated with the active conduct of your
any other individual unless that person is trade or business, (b) not lavish or extrava-
Line 22 your employee, the travel is for a bona fide gant, and (c) incurred while you or your
Generally, you can deduct the cost of sup- business purpose, and the expenses would employee is present at the meal.
plies only to the extent you actually con- otherwise be deductible by that person.
sumed and used them in your business You cannot deduct any expense paid or
Do not include expenses for meals and incurred for a facility (such as a yacht or
during the tax year (unless you deducted entertainment on this line. Instead, see the
them in a prior tax year). However, if you hunting lodge) used for any activity usually
instructions for lines 24b and 24c on this considered entertainment, amusement, or
had incidental supplies on hand for which page.
you kept no inventories or records of use, recreation.
you may deduct the cost of supplies you Instead of keeping records of your ac- Also, you cannot deduct membership
actually purchased during the tax year, pro- tual incidental expenses, you can use an dues for any club organized for business,
vided that method clearly reflects income. optional method for deducting incidental pleasure, recreation, or other social pur-
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pose. This includes country clubs, golf and Check box 32b if you have amounts for
athletic clubs, airline and hotel clubs, and Line 26 which you are not at risk in this business,
clubs operated to provide meals under con- Enter the total salaries and wages for the such as the following.
ditions favorable to business discussion. tax year. Do not include salaries and wages • Nonrecourse loans used to finance the
But it does not include civic or public serv- deducted elsewhere on your return or business, to acquire property used in the
ice organizations, professional organiza- amounts paid to yourself. Reduce your de- business, or to acquire the business that are
tions (such as bar and medical duction by the current year credits claimed not secured by your own property (other
associations), business leagues, trade as- on: than property used in the business). How-
sociations, chambers of commerce, boards
of trade, and real estate boards, unless a
• Form 5884, Work Opportunity ever, there is an exception for certain non-
Credit, recourse financing borrowed by you in
principal purpose of the organization is to
• Form 8844, Empowerment Zone and connection with holding real property.
entertain, or provide entertainment facili-
Renewal Community Employment Credit, • Cash, property, or borrowed amounts
ties for, members or their guests.
• Form 8845, Indian Employment used in the business (or contributed to the
business, or used to acquire the business)
There are exceptions to these rules as Credit, that are protected against loss by a guaran-
well as other rules that apply to sky-box • Form 8861, Welfare-to-Work Credit, tee, stop-loss agreement, or other similar
rentals and tickets to entertainment events. and arrangement (excluding casualty insurance
See Pub. 463.
• Form 8884, New York Liberty Zone and insurance against tort liability).
Generally, you may deduct only 50% of Business Employee Credit. • Amounts borrowed for use in the busi-
your business meal and entertainment ex- ness from a person who has an interest in
penses, including meals incurred while If you provided taxable fringe the business, other than as a creditor, or
away from home on business. For individu- benefits to your employees, who is related under section 465(b)(3) to a
als subject to the Department of Transpor- such as personal use of a car, do person (other than you) having such an in-
tation (DOT) hours of service limits, that not deduct as wages the amount terest.
percentage is increased to 65% for business applicable to depreciation and other ex-
penses claimed elsewhere. If all amounts are at risk in this business,
meals consumed during, or incident to, any check box 32a and enter your loss on line
period of duty for which those limits are in 31. But if you answered “No” to Question
effect. Individuals subject to the DOT G, you may need to complete Form 8582
hours of service limits include the follow-
ing persons:
Line 30 to figure your deductible loss. See the In-
Business Use of Your Home. You may be structions for Form 8582 for details.
• Certain air transportation workers able to deduct certain expenses for business If you checked box 32b, see Form 6198
(such as pilots, crew, dispatchers, mechan- use of your home, subject to limitations. to determine the amount of your deductible
ics, and control tower operators) who are You must attach Form 8829 if you claim loss. But if you answered “No” to Question
under Federal Aviation Administration reg- this deduction. For details, see the Instruc- G, your loss may be further limited. See the
ulations. tions for Form 8829 and Pub. 587. Instructions for Form 8582. If your at-risk
• Interstate truck operators who are amount is zero or less, enter zero on line 31.
under DOT regulations. Be sure to attach Form 6198 to your return.
• Certain merchant mariners who are Line 31 If you checked box 32b and you do not
under Coast Guard regulations. attach Form 6198, the processing of your
If you have a loss, the amount of loss you tax return may be delayed.
However, you may fully deduct meals, can deduct this year may be limited. Go to
incidentals, and entertainment furnished or Any loss from this business not allowed
line 32 before entering your loss on line 31. for 2003 because of the at-risk rules is
reimbursed to an employee if you properly If you answered “No” to Question G on
treat the expense as wages subject to with- treated as a deduction allocable to the busi-
Schedule C, also see the Instructions for ness in 2004. For details, see the Instruc-
holding. You may also fully deduct meals, Form 8582. Enter the net profit or deducti-
incidentals, and entertainment provided to tions for Form 6198 and Pub. 925.
ble loss here. Combine this amount with
a nonemployee to the extent the expenses any profit or loss from other businesses,
are includible in the gross income of that and enter the total on Form 1040, line 12,
person and reported on Form 1099-MISC. and Schedule SE, line 2. Estates and trusts
See Pub. 535 for details and other excep- should enter the total on Form 1041, line 3. Part III. Cost of Goods
tions.
If you provide day-care in your home,
If you have a net profit on line 31, this
amount is earned income and may qualify
Sold
see Pub. 587 for information on deducting you for the earned income credit. See the Generally, if you engaged in a trade or
the cost of meals and snacks you provide to instructions for Form 1040, line 63, for de- business in which the production, purchase,
your day-care recipients. tails. or sale of merchandise was an income-pro-
ducing factor, you must take inventories
Figure how much of the amount on line Statutory Employees. Include your net into account at the beginning and end of
24b is not deductible and enter that amount profit or deductible loss from line 31 with your tax year.
on line 24c. other Schedule C amounts on Form 1040, However, if you are a qualifying tax-
line 12. However, do not report this payer or a qualifying small business tax-
amount on Schedule SE, line 2. If you are payer, you may account for inventoriable
required to file Schedule SE because of items in the same manner as materials and
Line 25 other self-employment income, see the In- supplies that are not incidental. To change
Deduct only utility expenses for your trade structions for Schedule SE. your accounting method, see the instruc-
or business. tions for line F on page C-2.
Local Telephone Service. If you used your A qualifying taxpayer is a taxpayer (a)
home phone for business, do not deduct the Line 32 whose average annual gross receipts for the
base rate (including taxes) of the first At-Risk Rules. Generally, if you have (a) a 3 prior tax years are $1 million or less and
phone line into your residence. But you can business loss and (b) amounts in the busi- (b) whose business is not a tax shelter (as
deduct expenses for any additional costs ness for which you are not at risk, you will defined in section 448(d)(3)).
you incurred for business that are more have to complete Form 6198 to figure your A qualifying small business taxpayer
than the cost of the base rate for the first allowable loss. The at-risk rules generally is a taxpayer (a) whose average annual
phone line. For example, if you had a sec- limit the amount of loss (including loss on gross receipts for the 3 prior tax years are
ond line, you can deduct the business per- the disposition of assets) you can claim to more than $1 million but not more than $10
centage of the charges for that line, the amount you could actually lose in the million, (b) whose business is not a tax
including the base rate charges. business. shelter (as defined in section 448(d)(3)),
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and (c) whose principal business activity is method of accounting and enter the result • Qualified revitalization expenditures.
not an ineligible activity as explained in on line 35. If there is a difference between • Amounts paid to acquire, protect, ex-
Rev. Proc. 2002-28, 2002-18 I.R.B. 815. last year’s closing inventory and the pand, register, or defend trademarks or
You can find Rev. Proc. 2002-28 on page refigured amount, attach an explanation trade names.
815 of Internal Revenue Bulletin 2002-18 and take it into account when figuring your
at www.irs.gov/pub/irs-irbs/irb02-18.pdf. section 481(a) adjustment. See the example • Goodwill and certain other in-
on page C-2 for details. tangibles.
Under this accounting method, inven-
tory costs for raw materials purchased for In general, you may not amortize real
use in producing finished goods and mer- property construction period interest and
taxes. Special rules apply for allocating in-
chandise purchased for resale are deducti-
ble in the year the finished goods or
Line 41 terest to real or personal property produced
merchandise are sold (but not before the If you account for inventoriable items in in your trade or business.
year you paid for the raw materials or mer- the same manner as materials and supplies
that are not incidental, enter on line 41 the At-Risk Loss Deduction. Any loss from
chandise, if you are also using the cash this activity that was not allowed as a de-
method). Enter amounts paid for all raw portion of your raw materials and merchan-
dise purchased for resale that are included duction last year because of the at-risk rules
materials and merchandise during 2003 on is treated as a deduction allocable to this
line 36. The amount you can deduct for on line 40 and were not sold during the
year. activity in 2003.
2003 is figured on line 42.
Capital Construction Fund. Do not claim
Additional information. For additional on Schedule C or C-EZ the deduction for
guidance on this method of accounting for amounts contributed to a capital construc-
inventoriable items, see Rev. Proc.
2001-10, 2001-2 I.R.B. 272 if you are a Part V. Other tion fund set up under the Merchant Marine
Act of 1936. Instead, reduce the amount
qualifying taxpayer or Rev. Proc. 2002-28
if you are a qualifying small business tax- Expenses you would otherwise enter on Form 1040,
line 40, by the amount of the deduction.
payer. You can find Rev. Proc. 2001-10 on Include all ordinary and necessary business
page 272 of Internal Revenue Bulletin Next to line 40, enter “CCF” and the
expenses not deducted elsewhere on amount of the deduction. For details, see
2001-2 at www.irs.gov/pub/irs-irbs/ Schedule C. List the type and amount of
irb01-02.pdf, and Rev. Proc. 2002-28 on Pub. 595.
page 815 of Internal Revenue Bulletin each expense separately in the space pro-
vided. Enter the total on lines 48 and 27. Do Deduction for Clean-Fuel Vehicles and
2002-18 at www.irs.gov/pub/irs-irbs/ Clean-Fuel Vehicle Refueling Property.
irb02-18.pdf. not include the cost of business equipment
or furniture, replacements or permanent You may deduct part of the cost of quali-
improvements to property, or personal, liv- fied clean-fuel vehicle property used in
Note. Certain direct and indirect expenses your business and qualified clean-fuel ve-
may have to be capitalized or included in ing, and family expenses. Do not include
charitable contributions. Also, you may not hicle refueling property. See Pub. 535 for
inventory. See the instructions for Part II details.
beginning on page C-3. deduct fines or penalties paid to a govern-
ment for violating any law. For details on Disabled Access Credit and the Deduction
business expenses, see Pub. 535. for Removing Barriers to Individuals With
Disabilities and the Elderly. You may be
Line 33 Amortization. Include amortization in this able to claim a tax credit of up to $5,000 for
Your inventories can be valued at cost; cost part. For amortization that begins in 2003, eligible expenditures paid or incurred in
or market value, whichever is lower; or any you must complete and attach Form 4562. 2003 to provide access to your business for
other method approved by the IRS. How- individuals with disabilities. See Form
ever, you are required to use cost if you are You may amortize: 8826 for details. You can also deduct up to
using the cash method of accounting. • The cost of pollution-control facili- $15,000 of costs paid or incurred in 2003 to
ties. remove architectural or transportation bar-
• Amounts paid for research and experi- riers to individuals with disabilities and the
elderly. However, you cannot take both the
Line 35 mentation.
credit and the deduction on the same ex-
If you are changing your method of ac- • Certain business startup costs. penditures.
counting beginning with 2003, refigure last • Qualified forestation and reforestation
year’s closing inventory using your new costs. See Pub. 535 for limitations.
Principal Business or Professional Activity Codes

These codes for the Principal Business or Professional Select the category that best describes your primary of real estate agents and brokers) and enter it on line B
Activity classify sole proprietorships by the type of business activity (for example, Real Estate). Then of Schedule C or C-EZ.
activity they are engaged in to facilitate the select the activity that best identifies the principal Note. If your principal source of income is from
administration of the Internal Revenue Code. These source of your sales or receipts (for example, real farming activities, you should file Schedule F, Profit
six-digit codes are based on the North American estate agent). Now find the six-digit code assigned to or Loss From Farming.
Industry Classification System (NAICS). this activity (for example, 531210, the code for offices

Accommodation, Food Administrative & Support 561600 Investigation & security 561900 Other support services
Services, & Drinking Places and Waste Management & services (including packaging &
Remediation Services 561720 Janitorial services labeling services, &
Accommodation convention & trade show
Administrative & Support 561730 Landscaping services
721310 Rooming & boarding houses organizers)
Services 561110 Office administrative services
721210 RV (recreational vehicle)
561420 Telephone call centers Waste Management &
parks & recreational camps 561430 Business service centers Remediation Services
(including private mail (including telephone
721100 Travel accommodation answering services & 562000 Waste management &
(including hotels, motels, & centers & copy shops) remediation services
telemarketing bureaus)
bed & breakfast inns) 561740 Carpet & upholstery cleaning
services 561500 Travel arrangement &
Food Services & Drinking reservation services Agriculture, Forestry,
Places 561440 Collection agencies Hunting, & Fishing
561490 Other business support
722410 Drinking places (alcoholic 561450 Credit bureaus services (including 112900 Animal production (including
beverages) 561410 Document preparation repossession services, court breeding of cats and dogs)
722110 Full-service restaurants services reporting, & stenotype 114110 Fishing
722210 Limited-service eating places 561300 Employment services services) 113000 Forestry & logging (including
722300 Special food services 561710 Exterminating & pest control 561790 Other services to buildings & forest nurseries & timber
(including food service services dwellings tracts)
contractors & caterers) 561210 Facilities support 114210 Hunting & trapping
(management) services

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Principal Business or Professional Activity Codes (continued)

Support Activities for Educational Services Information 311300 Sugar & confectionery
Agriculture & Forestry 611000 Educational services 511000 Publishing industries (except product mfg.
115210 Support activities for animal (including schools, colleges, Internet) 311900 Other food mfg. (including
production (including farriers) & universities) coffee, tea, flavorings, &
Broadcasting (except Internet) seasonings)
115110 Support activities for crop & Telecommunications
production (including cotton Finance & Insurance Leather & Allied Product
515000 Broadcasting (except Internet) Manufacturing
ginning, soil preparation, Credit Intermediation &
planting, & cultivating) 517000 Telecommunications
Related Activities 316210 Footwear mfg. (including
115310 Support activities for forestry Internet Publishing & leather, rubber, & plastics)
522100 Depository credit Broadcasting
intermediation (including 316110 Leather & hide tanning &
Arts, Entertainment, & commercial banking, savings 516110 Internet publishing & finishing
Recreation institutions, & credit unions) broadcasting 316990 Other leather & allied product
Amusement, Gambling, & 522200 Nondepository credit Internet Service Providers, mfg.
Recreation Industries intermediation (including Web Search Portals, & Data Nonmetallic Mineral Product
713100 Amusement parks & arcades sales financing & consumer Processing Services Manufacturing
lending) 518210 Data processing, hosting, & 327300 Cement & concrete product
713200 Gambling industries
522300 Activities related to credit related services mfg.
713900 Other amusement & intermediation (including loan
recreation services (including 518111 Internet service providers 327100 Clay product & refractory
brokers) mfg.
golf courses, skiing facilities, 518112 Web search portals
marinas, fitness centers, Insurance Agents, Brokers, & 519100 Other information services 327210 Glass & glass product mfg.
bowling centers, skating Related Activities (including news syndicates 327400 Lime & gypsum product mfg.
rinks, miniature golf courses) 524210 Insurance agencies & and libraries) 327900 Other nonmetallic mineral
Museums, Historical Sites, & brokerages Motion Picture & Sound product mfg.
Similar Institutions 524290 Other insurance related Recording
712100 Museums, historical sites, & activities Mining
512100 Motion picture & video
similar institutions Securities, Commodity industries (except video 212110 Coal mining
Performing Arts, Spectator Contracts, & Other Financial rental) 212200 Metal ore mining
Sports, & Related Industries Investments & Related 512200 Sound recording industries 212300 Nonmetallic mineral mining
711410 Agents & managers for Activities & quarrying
artists, athletes, entertainers, 523140 Commodity contracts brokers Manufacturing 211110 Oil & gas extraction
& other public figures 523130 Commodity contracts dealers 315000 Apparel mfg. 213110 Support activities for mining
711510 Independent artists, writers, & 523110 Investment bankers & 312000 Beverage & tobacco product
performers securities dealers mfg. Other Services
711100 Performing arts companies 523210 Securities & commodity 334000 Computer & electronic Personal & Laundry Services
711300 Promoters of performing arts, exchanges product mfg.
812111 Barber shops
sports, & similar events 523120 Securities brokers 335000 Electrical equipment,
appliance, & component mfg. 812112 Beauty salons
711210 Spectator sports (including 523900 Other financial investment
professional sports clubs & activities (including 332000 Fabricated metal product mfg. 812220 Cemeteries & crematories
racetrack operations) investment advice) 337000 Furniture & related product 812310 Coin-operated laundries &
mfg. drycleaners
Construction of Buildings Health Care & Social 333000 Machinery mfg. 812320 Drycleaning & laundry
236200 Nonresidential building Assistance services (except
339110 Medical equipment & coin-operated) (including
construction Ambulatory Health Care supplies mfg. laundry & drycleaning
236100 Residential building Services 322000 Paper mfg. dropoff & pickup sites)
construction 621610 Home health care services 324100 Petroleum & coal products 812210 Funeral homes & funeral
Heavy and Civil Engineering 621510 Medical & diagnostic mfg. services
Construction laboratories 326000 Plastics & rubber products 812330 Linen & uniform supply
237310 Highway, street, & bridge 621310 Offices of chiropractors mfg. 812113 Nail salons
construction 621210 Offices of dentists 331000 Primary metal mfg. 812930 Parking lots & garages
237210 Land subdivision 621330 Offices of mental health 323100 Printing & related support 812910 Pet care (except veterinary)
237100 Utility system construction practitioners (except activities services
237990 Other heavy & civil physicians) 313000 Textile mills 812920 Photofinishing
engineering construction 621320 Offices of optometrists 314000 Textile product mills 812190 Other personal care services
Specialty Trade Contractors 621340 Offices of physical, 336000 Transportation equipment (including diet & weight
238310 Drywall & insulation occupational & speech mfg. reducing centers)
contractors therapists, & audiologists 321000 Wood product mfg. 812990 All other personal services
238210 Electrical contractors 621111 Offices of physicians (except 339900 Other miscellaneous mfg. Repair & Maintenance
238350 Finish carpentry contractors mental health specialists) Chemical Manufacturing
621112 Offices of physicians, mental 811120 Automotive body, paint,
238330 Flooring contractors 325100 Basic chemical mfg. interior, & glass repair
health specialists
238130 Framing carpentry contractors 325500 Paint, coating, & adhesive 811110 Automotive mechanical &
621391 Offices of podiatrists
238150 Glass & glazing contractors mfg. electrical repair &
621399 Offices of all other maintenance
238140 Masonry contractors miscellaneous health 325300 Pesticide, fertilizer, & other
238320 Painting & wall covering practitioners agricultural chemical mfg. 811190 Other automotive repair &
contractors 325410 Pharmaceutical & medicine maintenance (including oil
621400 Outpatient care centers change & lubrication shops &
238220 Plumbing, heating & air- mfg.
621900 Other ambulatory health care car washes)
conditioning contractors services (including ambulance 325200 Resin, synthetic rubber, &
238110 Poured concrete foundation & artificial & synthetic fibers & 811310 Commercial & industrial
services, blood, & organ machinery & equipment
structure contractors banks) filaments mfg.
325600 Soap, cleaning compound, & (except automotive &
238160 Roofing contractors Hospitals electronic) repair &
toilet preparation mfg.
238170 Siding contractors 622000 Hospitals maintenance
325900 Other chemical product &
238910 Site preparation contractors Nursing & Residential Care preparation mfg. 811210 Electronic & precision
238120 Structural steel & precast Facilities equipment repair &
concrete construction Food Manufacturing maintenance
contractors 623000 Nursing & residential care 311110 Animal food mfg. 811430 Footwear & leather goods
facilities 311800 Bakeries & tortilla mfg. repair
238340 Tile & terrazzo contractors
238290 Other building equipment Social Assistance 311500 Dairy product mfg. 811410 Home & garden equipment &
contractors 624410 Child day care services 311400 Fruit & vegetable preserving appliance repair &
238390 Other building finishing 624200 Community food & housing, & speciality food mfg. maintenance
contractors & emergency & other relief 311200 Grain & oilseed milling 811420 Reupholstery & furniture
238190 Other foundation, structure, & services 311610 Animal slaughtering & repair
building exterior contractors 624100 Individual & family services processing 811490 Other personal & household
238990 All other specialty trade 624310 Vocational rehabilitation 311710 Seafood product preparation goods repair & maintenance
contractors services & packaging

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Principal Business or Professional Activity Codes (continued)

Professional, Scientific, & Religious, Grantmaking, 441120 Used car dealers Couriers & Messengers
Technical Services Civic, Professional, & Similar 441229 All other motor vehicle 492000 Couriers & messengers
541100 Legal services Organizations dealers
Warehousing & Storage
541211 Offices of certified public 813000 Religious, grantmaking, civic, Sporting Goods, Hobby, Facilities
accountants professional, & similar Book, & Music Stores 493100 Warehousing & storage
541214 Payroll services organizations 451211 Book stores (except leases of
541213 Tax preparation services 451120 Hobby, toy, & game stores miniwarehouses &
541219 Other accounting services
Retail Trade 451140 Musical instrument & self-storage units)
Architectural, Engineering, & Building Material & Garden supplies stores
Related Services Equipment & Supplies Dealers 451212 News dealers & newsstands Utilities
444130 Hardware stores 451220 Prerecorded tape, compact 221000 Utilities
541310 Architectural services
444110 Home centers disc, & record stores
541350 Building inspection services Wholesale Trade
444200 Lawn & garden equipment & 451130 Sewing, needlework, & piece
541340 Drafting services goods stores
supplies stores Merchant Wholesalers,
541330 Engineering services 451110 Sporting goods stores Durable Goods
444120 Paint & wallpaper stores
541360 Geophysical surveying &
mapping services 444190 Other building materials Miscellaneous Store Retailers 423600 Electrical & electronic goods
dealers 453920 Art dealers 423200 Furniture & home furnishing
541320 Landscape architecture
services Clothing & Accessories 453110 Florists 423700 Hardware, & plumbing &
541370 Surveying & mapping (except Stores 453220 Gift, novelty, & souvenir heating equipment & supplies
geophysical) services 448130 Children’s & infants’ clothing stores 423940 Jewelry, watch, precious
541380 Testing laboratories stores 453930 Manufactured (mobile) home stone, & precious metals
448150 Clothing accessories stores dealers 423300 Lumber & other construction
Computer Systems Design & materials
Related Services 448140 Family clothing stores 453210 Office supplies & stationery
448310 Jewelry stores stores 423800 Machinery, equipment, &
541510 Computer systems design & 453910 Pet & pet supplies stores supplies
related services 448320 Luggage & leather goods
stores 453310 Used merchandise stores 423500 Metal & mineral (except
Specialized Design Services 453990 All other miscellaneous store petroleum)
448110 Men’s clothing stores
541400 Specialized design services retailers (including tobacco, 423100 Motor vehicle & motor
(including interior, industrial, 448210 Shoe stores vehicle parts & supplies
448120 Women’s clothing stores candle, & trophy shops)
graphic, & fashion design) 423400 Professional & commercial
448190 Other clothing stores Nonstore Retailers
Other Professional, Scientific, 454112 Electronic auctions
equipment & supplies
& Technical Services Electronic & Appliance Stores 423930 Recyclable materials
443130 Camera & photographic 454111 Electronic shopping
541800 Advertising & related services 423910 Sporting & recreational goods
supplies stores 454310 Fuel dealers & supplies
541600 Management, scientific, &
technical consulting services 443120 Computer & software stores 454113 Mail-order houses 423920 Toy & hobby goods &
541910 Market research & public 443111 Household appliance stores 454210 Vending machine operators supplies
opinion polling 443112 Radio, television, & other 454390 Other direct selling 423990 Other miscellaneous durable
541920 Photographic services electronics stores establishments (including goods
door-to-door retailing, frozen Merchant Wholesalers,
541700 Scientific research & Food & Beverage Stores food plan providers, party
development services 445310 Beer, wine, & liquor stores plan merchandisers, & Nondurable Goods
541930 Translation & interpretation 445220 Fish & seafood markets coffee-break service 424300 Apparel, piece goods, &
services 445230 Fruit & vegetable markets providers) notions
541940 Veterinary services 445100 Grocery stores (including 424800 Beer, wine, & distilled
541990 All other professional, supermarkets & convenience Transportation & alcoholic beverage
scientific, & technical stores without gas) Warehousing 424920 Books, periodicals, &
services 445210 Meat markets 481000 Air transportation newspapers
445290 Other specialty food stores 485510 Charter bus industry 424600 Chemical & allied products
Real Estate & Rental & 424210 Drugs & druggists’ sundries
Furniture & Home Furnishing 484110 General freight trucking, local
Leasing 424500 Farm product raw materials
Stores 484120 General freight trucking, long
Real Estate distance 424910 Farm supplies
442110 Furniture stores
531100 Lessors of real estate 485210 Interurban & rural bus 424930 Flower, nursery stock, &
(including miniwarehouses & 442200 Home furnishings stores florists’ supplies
transportation
self-storage units) Gasoline Stations 486000 Pipeline transportation 424400 Grocery & related products
531210 Offices of real estate agents 447100 Gasoline stations (including 482110 Rail transportation 424950 Paint, varnish, & supplies
& brokers convenience stores with gas) 424100 Paper & paper products
487000 Scenic & sightseeing
531320 Offices of real estate General Merchandise Stores transportation 424700 Petroleum & petroleum
appraisers 452000 General merchandise stores products
485410 School & employee bus
531310 Real estate property managers transportation 424940 Tobacco & tobacco products
Health & Personal Care Stores
531390 Other activities related to real 484200 Specialized freight trucking 424990 Other miscellaneous
estate 446120 Cosmetics, beauty supplies, &
perfume stores (including household moving nondurable goods
Rental & Leasing Services 446130 Optical goods stores
vans)
532100 Automotive equipment rental 446110 Pharmacies & drug stores
485300 Taxi & limousine service Wholesale Electronic
& leasing
446190 Other health & personal care
485110 Urban transit systems Markets and Agents &
532400 Commercial & industrial stores 483000 Water transportation Brokers
machinery & equipment 485990 Other transit & ground 425110 Business to business
rental & leasing Motor Vehicle & Parts Dealers passenger transportation electronic markets
532210 Consumer electronics & 441300 Automotive parts, accessories, 488000 Support activities for 425120 Wholesale trade agents &
appliances rental & tire stores transportation (including brokers
532220 Formal wear & costume 441222 Boat dealers motor vehicle towing)
rental 441221 Motorcycle dealers 999999 Unclassified establishments
532310 General rental centers 441110 New car dealers (unable to classify)
532230 Video tape & disc rental 441210 Recreational vehicle dealers
532290 Other consumer goods rental (including motor home &
travel trailer dealers)

C-9