The Right Business Code for Your Sole Proprietorship Business | USTaxAid

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The Right Business Code for Your Sole Proprietorship Business

Written by Diane Kennedy, CPA on November 21, 2022

The NAICS code is required for all business returns. Today, we’re going to look just at Schedule C, Sole Proprietorship, businesses. This number should be entered on your Schedule C tax form.

NAICS stands for North American Industry Classification System. This system is used for Federal statistics and analysis. With this system, they can compare like businesses in terms of revenue, expenses and profit percentage.

In order to get federal contracts, grants and be eligible for incentive programs, you’ll need to have an NAICS for your business. It’s not a case of whether you need one or not. (You do.) It’s a case of making sure you have the right one.

To find your NAICS, go to https://www.census.gov/naics/. You’ll find an area to enter a couple of keywords.

 

Here are some of the popular NAICS codes that I get asked about:

72119        Other traveler accommodation i.e., AirBnB, etc.

454100      Electronic shopping i.e., Amazon sellers, etc.

61143        Professional & mgmt. training, i.e., business coaches

 

812990      All other professional services, i.e., life coaches

 

711500      Independent Artists & Writers, i.e., writers & artists

 

541511      Custom Computer Programming, i.e., computer programmers

 

519130      Internet publishing & broadcast channels, i.e., bloggers, YouTubers, Social influencers

 

If you plan to prepare your own tax return this year, make sure you go through the details for things like this. If your business is new this year, take a minute to write out a short few line description of what it does for your tax preparer. That way your tax pro will know how to set it up correctly for you when you file.

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