Business codes are used by the Internal Revenue Service to identify various types of business activity and are based upon the North American Industry Classification System. These code numbers are required when completing Schedule C of IRS Form 1040.
The business codes are an important part of Schedule C. The IRS publishes a set of instructions for filling out Schedule C containing a list of business activity codes, listed first by general categories which include most types of for-profit business endeavors. For example, listed under "Construction of Buildings" are nonresidential building construction (coded 236200) and residential building construction (coded 236100). "Health Care and Social Assistance" has specific codes for home health care (621610), medical and diagnostic laboratories (621510), chiropractors (621319) and dentists (621210).
Each business must identify itself by locating the most appropriate general category found on pages 16 and 17 of the instructions and then selecting the most relevant sub-category. There is also a category designated "Other Services" for businesses which do not fall into one of the larger groups. At the end of the list, there is a code which may be used for unclassified establishments, which is 999999.
Schedule C for IRS Form 1040 and the 17-page booklet of instructions can be found on the IRS website and can be downloaded and printed. They can be also be ordered from the IRS and delivered by the U.S. Postal Service.