Free Schedule C Expenses Worksheet
Nobody hands you a tax tracker when you start selling products online. Here's one. Our free Schedule C expenses worksheet is pre-labeled with all Part II expense categories, with examples for materials, supplies, marketplace fees, and shipping, so you're not scrambling at tax time.
- Pre-labeled with all Schedule C Part II expense categories
- Category examples for materials, supplies, marketplace fees, and shipping
- Monthly tracking columns so you record expenses as they happen
- Free to download — Excel, Numbers, and Google Sheets
Join the Stocksmith mailing list and we'll send you our Schedule C expenses worksheet template for free! We typically send 2-4 emails a month about small batch production topics which we hope are useful to our readership.
What's included
Stop scrambling at tax time — start tracking all year
The real problem isn't filling out Schedule C in April — it's not having organised expense records to fill it with. This free worksheet gives you a structured way to record deductible business expenses as you go, organised by the exact Part II categories the IRS uses, with examples for small-batch product businesses.
Schedule C categories, pre-labeled
Every Part II expense line is already set up: advertising, office expenses, supplies, utilities, and more. You fill in the amounts; the worksheet handles the structure.
- All Part II lines mapped to IRS categories
- "Purchases less personal-use withdrawals" column included
- Category totals calculated automatically
Built for product businesses
Each category includes examples for businesses that buy materials and sell finished goods: marketplace fees under "Commissions and Fees", raw materials under "Supplies", packaging under "Other Expenses". No guessing which line something belongs to.
- Examples for materials, supplies, and packaging
- Etsy, Shopify, and marketplace fee categories
- Built for sole proprietors and single-member LLCs
Track all year, not just in April
Monthly columns mean you record expenses as they happen, so your totals are always current. When your accountant asks for your Schedule C figures, you already have them.
- Monthly columns for ongoing tracking
- Year-end totals roll up automatically
- Flags categories with no recorded activity
Ready to track your Schedule C expenses properly?
Our free worksheet has every Part II category pre-labeled with product-business examples, so you can start recording expenses from your very next purchase.
Download the free worksheet →Excel, Numbers & Google Sheets compatible
Template walkthrough
How to use the Schedule C expenses worksheet
Built for product businesses that operate as sole proprietors or single-member LLCs and file Schedule C with their personal tax return. It gives you a single, organised place to record every deductible business expense as it happens, so the hard work is done before tax season, not during it.
To get started, download the worksheet by entering your email address above. You'll receive a link to the file, which opens in Excel, Numbers, or Google Sheets. The worksheet is organised around the same Part II expense categories as Schedule C itself, so the totals flow directly into your tax return, or hand straight to your accountant.
Step 1 — Set up your expense categories
The worksheet comes pre-labeled with all Schedule C Part II lines. You don't need to create categories from scratch. Each category includes a notes column with examples so you know what to record where.
Step 2 — Record expenses as they happen
The best time to log an expense is when it occurs, not weeks later. Use the monthly columns to record amounts as you receive receipts or invoices: materials orders, marketplace listing fees, packaging supplies, shipping costs. Spending 5 minutes a week is far easier than reconstructing 12 months of expenses in March.
Step 3 — Track your "personal use" withdrawals
One of the most misunderstood Schedule C line items for product businesses is "purchases less cost of items withdrawn for personal use." If you buy materials for your business but use some of them personally (say, you make candles and burn some yourself), you need to subtract the value of those personal withdrawals from your total material cost. The worksheet has a dedicated column for this so you never under-report. See the section below for a full explanation.
Step 4 — Pull your year-end totals
At year end, the worksheet totals each category for you. You or your accountant can transfer these figures directly to the matching lines on Schedule C. The worksheet also flags categories where you had no expenses, as a useful double-check that nothing was missed.
Expense categories in this worksheet (Schedule C Part II)
Each line below maps directly to a Schedule C Part II line item. Product-business examples are included in the worksheet for each.
Advertising
Ad spend on marketplaces or social platforms, sponsored posts, promoted listings. Does not include the cost of your product photography (that's under "Other").
Car and Truck Expenses
Mileage or actual costs for business-related driving: trips to the post office, supply runs, trade show travel. Keep a mileage log if you use the standard mileage rate.
Commissions and Fees
Marketplace transaction fees, payment processing fees, and platform commission — Etsy, Shopify, PayPal, Faire, Square, and similar.
Contract Labor
Payments to independent contractors who helped with your business (a photographer for product shots, a bookkeeper, a part-time packer). Not for employees (that's "Wages").
Depreciation
The cost of business equipment spread over its useful life. Relevant if you purchased production equipment or other significant tools. Your accountant calculates this.
Insurance
Business liability insurance, product liability insurance, trade show insurance. Not personal health insurance (that's a separate deduction).
Legal and Professional Services
Accountant or bookkeeper fees, legal fees for business matters, business formation costs.
Office Expense
Printer ink, paper, pens, stamps for business use, a portion of your home office supplies.
Supplies
Raw materials used to make your products — usually the largest expense category for product businesses. Note: this is where your COGS-related supply costs live. Your finished product COGS goes on a separate line in Schedule C Part I; see our Schedule C guide for the distinction.
Taxes and Licenses
Business registration fees, seller's permit fees, local business license fees. Not your personal income tax.
Travel
Overnight travel expenses for business purposes: accommodation, flights, meals at 50%, conference registration. Must be genuinely business-related.
Meals
50% deductible business meals. Common examples: meals with wholesale buyers, accountant meetings over lunch. Not everyday meals.
Utilities
A portion of your home utilities (electricity, internet) attributable to your home office or studio. Requires the home office deduction to apply.
Other Expenses
Anything deductible that doesn't fit above: packaging materials, labels, product photography, trade show booth fees, subscriptions to business software (including Stocksmith).
What does "purchases less cost of items withdrawn for personal use" mean?
This is one of the most confusing lines on the whole Schedule C form, and it's worth a plain-English explanation. It appears in Schedule C Part III (Cost of Goods Sold), and it's specifically relevant to product businesses that buy materials but occasionally use some of those materials personally.
Here's the plain-English version: if you bought 10kg of soy wax for your candle business but used 1kg to make candles for your own home, you can only claim the remaining 9kg as a business expense. The 1kg you used personally has to be "withdrawn" — subtracted from your total purchase cost before it reaches your COGS calculation.
The formula on Schedule C is:
Purchases for the year
minus: cost of items you withdrew from inventory for personal use
= the deductible amount that feeds into your COGS
For most small-batch product businesses, the personal-use withdrawal is small or zero, especially if you keep personal and business materials strictly separate. The worksheet includes a column to track any withdrawals so you have the number ready if your accountant asks.
Want to understand how all of this connects to your COGS report? Read our full Schedule C guide for a line-by-line walkthrough of the whole form, including how this figure flows from Part III into your return.
What is a Schedule C expenses worksheet?
A Schedule C expenses worksheet is a structured tracking tool that records your deductible business expenses in the same categories as the IRS Schedule C tax form. Instead of sorting through a year's worth of receipts in April, you record expenses as they happen — one row per expense, in the right category, with a running monthly total.
Why do product businesses need a dedicated worksheet?
Generic expense trackers don't map to Schedule C categories. That means extra work at tax time: either translating your records into IRS categories yourself, or paying your accountant to do it. A Schedule C worksheet built for product businesses does the translation upfront. Marketplace transaction fees go in "Commissions and Fees", raw materials go in "Supplies", booth fees go in "Other Expenses". No ambiguity.
There's also the materials complexity. Product businesses buy supplies that get used across multiple products, sometimes over months. The worksheet tracks your total purchases, lets you deduct any personal-use withdrawals, and feeds a clean number into your COGS calculation. That's the figure that actually reduces your taxable income.
What are the limitations of using a spreadsheet?
A Schedule C worksheet is a solid starting point for tax tracking, but it has real limits as your business grows.
The biggest limitation is that it's disconnected from your inventory. You can track that you spent $400 on wax in March, but the spreadsheet can't tell you how much of that wax you've used, what it cost per unit, or what's still sitting on your shelf. That connection between purchases, production, and ending inventory is what COGS tracking actually requires.
When your business reaches that point, Stocksmith does both: it tracks your material purchases and automatically calculates COGS per product using your recipes. At tax time, Stocksmith's COGS reporting includes Schedule C guidance, so you can pull your COGS, income, and expense totals directly from the app instead of reconciling a spreadsheet.
Who uses this
Who should use this worksheet?
Built for small-batch product businesses that need a structured way to track deductible expenses before their accountant asks.
Online marketplace sellers filing Schedule C
You sell products on Etsy or a similar marketplace, you're a sole proprietor, and you need a structured way to track your deductible expenses before your accountant asks.
Shopify sellers in their first or second year
You're running a product business on Shopify, not yet ready to invest in full inventory software, but want your tax records in good shape from day one.
Small-batch food, cosmetics, and candle businesses
You operate under a home-based or licensed production setup, sell direct-to-consumer or at markets, and want category-by-category expense tracking without buying accounting software.
Jewelry and textile businesses
You buy materials by weight or by the spool and sell finished pieces. The worksheet's "Supplies" category and personal-use withdrawal column handle your specific tracking needs.
Anyone replacing the shoebox method
You've been collecting receipts in a folder (or a drawer) and handing them to your accountant in a pile. This worksheet turns that pile into a clean, categorised record before you hand it over.
First-year product businesses
You started selling this year and want to build good financial habits from the start. Tracking expenses by Schedule C category now means no catch-up work next April.
Frequently Asked Questions
What expenses go on Schedule C for a product business?
Schedule C Part II covers all ordinary and necessary business expenses: advertising, commissions and fees (marketplace transaction fees, payment processing), supplies (raw materials), office expenses, shipping, insurance, legal and professional fees, and more. For product businesses, the largest categories are typically Supplies (raw materials), Commissions and Fees (marketplace and payment fees), and Other Expenses (packaging, booth fees, subscriptions). Your cost of goods sold goes on a separate Part I line, not Part II; the worksheet covers both.
What is the Schedule C expenses worksheet for?
The worksheet is a year-round expense tracker, not a tax filing tool. You use it throughout the year to record every deductible business expense in the right Schedule C category as it happens, so when tax time arrives, your figures are already organised and totalled. It's designed to replace the shoebox-of-receipts approach and give your accountant (or yourself) a clean, category-by-category summary ready to transfer to the actual Schedule C form.
Does Stocksmith generate Schedule C reports automatically?
Stocksmith tracks your material purchases throughout the year and calculates your opening and closing inventory values automatically. It includes Schedule C guidance in its reports, so at tax time you can pull your COGS, income, and expense totals directly from the app and transfer them to the form, with no spreadsheet needed. The free worksheet is a great starting point; Stocksmith is the step up when you want it automated.
What does "personal use" mean on Schedule C?
In Schedule C Part III (Cost of Goods Sold), you're asked to calculate "purchases less cost of items withdrawn for personal use." This means: if you bought materials for your business but used some of them personally (a candle business owner who burns some candles at home, a soap business owner who keeps some bars), you have to subtract the value of those personal items from your total purchase amount. Only the business-use portion is deductible. The worksheet includes a dedicated column to track personal withdrawals so you have the number ready. For most product businesses, the amount is small or zero.
Is this Schedule C worksheet really free?
Yes, completely free. Enter your email address and we'll send you a download link immediately. There's no payment required and no trial period. You'll also receive occasional emails from Stocksmith covering inventory and tax tracking for product businesses, which you can unsubscribe from at any time.
When you outgrow the worksheet
Stocksmith keeps your COGS and expenses current all year
A worksheet gives you an organised set of expense records once a year, if you maintained it faithfully. That's genuinely useful — and it's also the ceiling. It tracks what you spent, but it can't tell you how much material you've used, what it cost per unit, or what's still on the shelf.
Stocksmith closes that gap. Record a purchase and it's tracked against the material it bought. Record a production run and materials come out of stock at their real landed cost. Your cost of goods sold, expenses, and inventory valuation are current whenever you look, not just reconstructed once a year.
The discipline you build with this worksheet transfers directly. Stocksmith removes the data entry and the spreadsheet reconciliation that comes with it.
No credit card required. Takes hours to set up, not weeks.
With the worksheet
- Expenses organised, but disconnected from your inventory
- COGS still reconstructed by hand at tax time
- Personal-use withdrawals tracked manually, easy to miss
- One mistyped formula quietly corrupting a year of figures
With Stocksmith
- Expenses and inventory tracked together, automatically
- Schedule C guidance built into your reports
- Landed costs recalculated with every purchase
- COGS and expense reports ready at tax time
Related resources
Free Template
Inventory & COGS Spreadsheet for Excel
Track materials, purchases, and production runs, and calculate the COGS figure that feeds directly into Schedule C Part III.
Guide
Schedule C Guide for Product Businesses
A line-by-line walkthrough of the whole Schedule C form, including a worked example and the most common filing mistakes.
All Resources
Free Templates & Calculators
Every free spreadsheet, template, and calculator we publish for small-batch manufacturers.