Besides W-2 income, I have Schedule E (Rental Property) and Schedule C (Sole proprieter of a Service business) Income. This will be my first year for the latter.

I have expenses such as Bank Fees, that it seems could be used in any of the three.

Is there a benefit to me to apply these expenses to any of the three... or does it not matter?

Thanks!

Rick:

It DOES matter, because the income on the Schedule C is subject to BOTH income taxes and self-employment taxes, whereas the income from the rental property is subject to ONLY income taxes.

Ideally, you should have SEPARATE bank accounts for your Schedule C and Schedule E rental properties, but if you do not, you can simply pro-rate the expenses between the two. As long as you have some reasonable justification for the pro-ration (number of checks written, amount of money from each activity), the IRS will not question the deduction.