PatraX — IRS Schedule C Reference

IRS Schedule C — Line Reference

Maps every Schedule C line to the PatraX deduction category and shows how each value is populated.
Use this to verify what needs a transaction, what needs a scan, and what the app calculates automatically.

Auto — pulled from Plaid bank transactions (user-categorized or Plaid-matched)

Scan — user photographs the document in Receipts tab; AI extracts the amount

Calculated — app computes from logged data (miles, sq ft, etc.)

Hybrid — auto transactions + scan or manual input for override/adjustment

Manual — user must type a dollar amount (no scan or transaction available)

N/A — not applicable to gig / self-employed workers

📸 Scan workflow: Receipts tab → tap the relevant chip (Form 1098, Loan interest, SEP-IRA / 401k, Health ins, HSA, DMV / Reg) → photograph or pick from gallery → AI extracts the amount and pre-selects the category → tap Save. The entry is stored as a real transaction in Deductions, visible and editable.

Only two truly manual entries remain: bad_debts (rare — accrual-basis only, unpaid invoices) and Inventory (beginning/ending counts in Part III). Everything else either comes from the bank feed automatically or can be scanned from a document.

Part I — Gross Income

Line	Description	PatraX Category	Method	Notes
1	Gross receipts or sales	is_gig_income	Calculated	Sum of all transactions marked `is_gig_income = true`. PatraX auto-flags deposits from known platforms; user confirms or toggles manually.
2	Returns and allowances	—	N/A	PatraX does not track platform chargebacks or refunds. If material, user must subtract manually on the tax return.
4	Cost of goods sold (Part III)	cogsmerch_cogs	Auto	Transactions categorized as cost of goods or merch cost of goods. Resellers must still verify beginning/ending inventory manually (Part III, lines 33–42).
6	Other income	—	N/A	Not tracked. Examples: loan forgiveness, insurance reimbursement. Enter manually on tax return.

Part II — Expenses

Line	Description	PatraX Category	Method	Notes
8	Advertising	marketing	Auto	Promoted posts, paid ads, sponsored content charges from bank feed.
9	Car and truck expenses	mileage gas car_insurance car_maint vehicle_loan_int vehicle_reg	Hybrid	Standard mileage: App calculates from the Miles tab (miles × IRS rate). Gas, maintenance, and insurance are excluded when using standard rate. Actual expenses: Gas, insurance, and maintenance auto from bank feed. `vehicle_loan_int` → scan via 📄 Loan interest chip. `vehicle_reg` → scan via 🚗 DMV / Reg chip if paid by check or mail (auto if paid by card).
10	Commissions and fees	platform_fees	Auto	Upwork service %, PayPal/Stripe processing fees charged to card.
11	Contract labor	contractor_labor	Auto	Payments to editors, assistants, freelancers. Note: contractors paid ≥$600/year require a 1099-NEC — PatraX does not generate these.
12	Depletion	—	N/A	Applies to natural resource extraction. Not relevant for gig workers.
13	Depreciation (Form 4562)	depreciation	Hybrid	PatraX captures the purchase transaction (camera, laptop, equipment). However, Section 179 / bonus depreciation elections and multi-year schedules require Form 4562, which the app does not generate. User or tax preparer must complete Form 4562 separately.
14	Employee benefit programs	—	N/A	Applies only if you have W-2 employees. Gig workers typically have none.
15	Insurance (other than health)	car_insurance liability_ins str_insurance	Auto	Rideshare/delivery policy, professional liability, and short-term rental insurance transactions from bank feed. Health insurance goes on Schedule 1 (Form 1040), not here.
16a	Mortgage interest (Form 1098)	mortgage_int	Scan	Scan via 📋 Form 1098 chip in Receipts tab. AI reads Box 1 (mortgage interest) and Box 10 (property taxes) directly from the lender's Form 1098 and stores them as real deduction transactions. Rental hosts (Airbnb/VRBO): amount is automatically prorated by rental days ÷ 365.
16b	Other business interest	vehicle_loan_int biz_loan_int	Scan	Scan via 📄 Loan interest chip in Receipts tab. AI reads the annual interest total from the lender's year-end interest statement. Only the interest portion is deductible (not principal) — the lender's statement shows the split that the bank transaction does not.
17	Legal and professional services	professional_svcs	Auto	Accountant, tax prep, and legal fees paid by card.
18	Office expense	software supplies	Auto	Editing apps, SaaS tools, office materials from bank feed.
19	Pension / profit-sharing plans	sep_ira	Scan	Scan via 🏦 SEP-IRA / 401k chip in Receipts tab. AI reads the contribution amount from the brokerage confirmation or account statement. Contributions are transfers, not card charges, so they won't appear in the bank feed. Cap: 20% of net SE profit or $69,000 (2024).
20a	Vehicle / machinery rent or lease	—	N/A	Not tracked. Would apply if worker leases a commercial vehicle or equipment.
20b	Other business property rent	storage_rent	Auto	Storage unit monthly charge from bank feed.
21	Repairs and maintenance	car_maint home_maint	Auto	Oil changes, tire replacements, property repairs from bank feed. Cash payments for repairs are not captured — user must add as a manual transaction in the Receipts tab.
22	Supplies	supplies pet_supplies hot_bags insulated_bags tools cleaning welcome_amenities linens safety_gear	Auto	All consumable and small-equipment categories. Multiple PatraX categories roll up here on the actual tax return — tax preparer must aggregate.
23	Taxes and licenses	vehicle_reg biz_license	Hybrid	`vehicle_reg`: Auto if paid by card. If paid by check, mail, or in-person, scan the DMV bill via 🚗 DMV / Reg chip in Receipts tab. `biz_license`: Same — auto from bank feed if card payment; scan the invoice otherwise.
24a	Travel	travel	Auto	Flights, hotels, and Airbnb charges for business travel from bank feed. Must be primarily for business to be 100% deductible.
24b	Meals (50% deductible)	meals	Auto	PatraX applies the 50% deductibility automatically (TCJA 2018). Entertainment (concerts, sports) is 0% — do not categorize those here.
25	Utilities	phone internet electricity rental_utilities	Auto	Phone at 70%, internet at 50% (or home-office %) applied automatically. Electricity deducted at studio % (home office sq ft ÷ total). Rental utilities prorated by rental days. All pulled from bank feed.
26	Wages	—	N/A	Applies only if worker has W-2 employees and runs payroll. Most gig workers have none. Payments to contractors go on Line 11, not here.
27a	Other expenses (Part V)	camera_gear streaming_gear props_wardrobe education music_license stock_assets conferences ext_storage seller_subs po_box inventory_sw return_shipping website_hosting bank_fees lead_gen background_check roadside_assist dash_cam uniform parking_tolls shipping listing_photo smart_home property_mgmt_sw startup_costs bad_debts	Hybrid	Most are Auto (transaction-based from bank feed) or scan receipts in the Receipts tab. Only truly manual within this group: `bad_debts` — unpaid client invoices; only deductible on accrual basis, not cash basis. Rare for gig workers. No scan possible. `startup_costs` — scan individual launch expense receipts in Receipts tab; $5,000 deductible Year 1 (Sec. 195), rest amortized. Amortization math still done by tax preparer. `dash_cam`, `camera_gear`, `ext_storage` — large purchases may qualify for Section 179 full expensing; Form 4562 still needed for the election.
30	Home office deduction	home_office	Hybrid	Simplified method: User enters office sq ft in Settings → Tax. App calculates $5 × sq ft (max 300 sq ft = $1,500/yr). No transaction needed. Actual method: User enters office sq ft + total home sq ft. App applies the % to rent/mortgage + utilities transactions from the bank feed automatically.

Part III — Cost of Goods Sold (Resellers / FBA)

Line	Description	PatraX Category	Method	Notes
33–35	Inventory method + beginning inventory	—	Manual	Truly manual. IRS asks for the accounting method (cost, lower of cost or market) and beginning-of-year inventory value. PatraX does not track inventory levels — user must enter from their own records.
36	Purchases less personal use	cogs merch_cogs	Auto	Purchase-of-resale-items transactions from bank feed. User must subtract the cost of any items withdrawn for personal use.
41–42	Ending inventory + COGS	—	Manual	Truly manual. End-of-year inventory count must be done by the user. PatraX cannot know what sold vs. what remains in stock.

Part IV — Vehicle Information (required if claiming car expenses)

Line	Description	PatraX Category	Method	Notes
43	Date vehicle placed in service	—	Manual	Not tracked. User enters on tax return.
44a	Total miles driven during year	mileage	Calculated	Sum of all miles logged in the Miles tab. User logs trips; app totals them.
44b	Business miles	mileage	Calculated	All miles logged in PatraX are assumed to be business miles. User responsible for not logging personal trips.
44c	Commuting miles	—	Manual	Commuting miles are not deductible. PatraX does not distinguish commute vs. business driving. User must exclude commute miles from their log.
45–47	Vehicle available for personal use, another vehicle available, evidence	—	Manual	IRS yes/no attestation questions answered on the tax return. PatraX mileage log serves as the written evidence (Line 47b).

Above-the-Line Deductions — Form 1040 Schedule 1 (not Schedule C)

Form	Description	PatraX Category	Method	Notes
Sch 1 L17	Self-employed health insurance deduction	health_ins	Scan	Scan via 🏥 Health ins chip in Receipts tab. AI reads the premium amount from the insurance carrier's billing statement or Explanation of Benefits. Goes on Schedule 1 Line 17, not Schedule C.
Sch 1 L16	Self-employed SEP-IRA / Solo 401k	sep_ira	Scan	Scan via 🏦 SEP-IRA / 401k chip in Receipts tab. AI reads the contribution amount from the brokerage confirmation or account statement. Goes on Schedule 1 Line 16.
Sch 1 L13	HSA deduction	hsa	Scan	Scan via 💊 HSA chip in Receipts tab. AI reads the contribution amount from the HSA provider's statement. Limits: $4,150 single / $8,300 family (2024). Goes on Schedule 1 Line 13 via Form 8889.

Summary — Scan & Manual Lines

PatraX Category	Schedule C Line	Method	Source Document / Chip
mortgage_int	16a	Scan	📋 Form 1098 — lender's Form 1098, Box 1
property_tax	16a (via Form 1098)	Scan	📋 Form 1098 — lender's Form 1098, Box 10
vehicle_loan_int	16b	Scan	📄 Loan interest — lender's year-end interest statement
biz_loan_int	16b	Scan	📄 Loan interest — lender's year-end interest statement
sep_ira	19 / Sch 1 L16	Scan	🏦 SEP-IRA / 401k — brokerage contribution confirmation or account statement
health_ins	Sch 1 L17	Scan	🏥 Health ins — insurance carrier billing statement or EOB
hsa	Sch 1 L13	Scan	💊 HSA — HSA provider statement or Form 5498-SA
vehicle_reg	23	Scan	🚗 DMV / Reg — DMV registration renewal bill (if not a card charge)
startup_costs	27a / Part V	Scan	Scan individual launch expense receipts via Receipts tab. $5,000 deductible Year 1 (Sec. 195), remainder amortized 180 months — amortization schedule done by tax preparer.
home_office (sq ft)	30	Hybrid	Office sq ft entered in Settings → Tax; transactions (rent, utilities) pulled automatically from bank feed.
bad_debts	27a / Part V	Manual	Unpaid client invoices. Only deductible on accrual basis (rare for gig workers on cash basis). No scan possible — user enters from own invoice records.
Inventory (Part III)	33–42	Manual	Beginning and ending inventory counts not tracked by app. User must enter from own inventory records or Amazon Seller Central.
Vehicle dates & personal use (Part IV)	43–47	Manual	IRS yes/no attestation questions answered directly on the tax return. PatraX mileage log serves as written evidence.