Occasionally an individual taxpayer's Schedule C may have a negative expense. For example, for a particular expense category if the taxpayer receives a refund for a prior year's expenditure that is more than the current year's total expenditures, the total amount for that expense category will be negative.

These are the Schedule C expense categories that the IRS allows to be negative:

ExpenseCan be
negative?
Advertising✔
Car and truck✘
Commissions and fees✔
Contract labor✔
Depletion✔
Depreciation and sec 179✘
Employee benefit programs✔
Insurance✘
Interest - Mortgage✘
Interest - Other✔
Legal and professional services✘
Office expense✘
Pension and profit-sharing plans✔
Rent or lease - vehicles, machinery✔
Rent or lease - other business property✔
Repairs and maintenance✘
Supplies✔
Taxes and licenses✔
Travel and meals - travel✘
Travel and meals - deductible meals✘
Utilities✘
Wages✘
Other expenses✘