What Can I Deduct for My Business?

What Can I Deduct for My Business?

There is no comprehensive list of what you can and cannot deduct as a business owner. Every business and every industry is unique, so what you can write off will vary based on your unique situation.

The IRS guidelines state that you can write off expenses that are ordinary (i.e. common and accepted in your industry) or necessary (i.e. helpful and appropriate for your business). The key here is to have a legitimate business purpose behind the expense. If you can make a good case for why the expense will help your business function or grow, that's a good indication it is an expense you can deduct.

Some common business deductions include:
  1. Training and Education
    1. Training and education is deductible as long as the training maintains or improves skills needed in your present work (i.e. singing lessons for a stage actor) or is required by law for you to keep your present job or salary (i.e. education to maintain a license). For example, an IT consultant might not be able to deduct the cost of their Master's Degree in English Literature, but courses they take to improve their Python coding skills could be a deduction.
  2. Cell Phones
    1. Business owners can deduct the full cost of their phone and their monthly phone bill as a business expense. Keep in mind, if your personal cell phone plan is part of a family plan, only the cost of your individual phone or line can be deducted.
  3. Conventions, Seminars, and Tradeshows
    1. The cost to attend these events — as long as attending serves a legitimate business purpose — is fully deductible for business owners! This includes entry fees, booths, as well as travel and lodging expenses related to your trip if the event is far from home.
  4. Business Trips and Travel
    1. Travel expenses you can write off include transportation (flights, car rental, transit fees), lodging, and meals. To qualify as a business expense, the travel must be primarily for business purposes and must also be reasonable and ordinary for the type of business (nothing lavish). Keep detailed records of your travel expenses, including receipts, in the event of an audit.
  5. Vehicle Expenses
    1. This could include purchases, leases, mileage, gas, repairs, maintenance, and insurance for vehicles used for your business. How you deduct these expenses depends on whether you use the vehicle for only business use or for business and personal use. See "How Do I Deduct Vehicle Expenses" for more information.
  6. Advertising and Marketing 
    1. This can include ads, signs, billboards, commercials, swag, brand development, marketing tools, promotional events, etc.
  7. Business Insurance
    1. This includes business-related insurance expenses, such as data breach insurance, liability insurance, property insurance, malpractice insurance, etc.
  8. A Home Office 
    1. Self-employed taxpayers can deduct expenses associated with an area of their home used regularly and exclusively for business (with the exception of inventory storage and home daycare facilities). To learn more, check out "How Do I Write Off My Home Office."
  9. Interest
    1. Any interest accrued on a small business loan, business credit cards, business vehicle or equipment loans, or building loans or mortgages for the year can be deducted on your tax return.
  10. Salaries and Benefits
    1. Employee salaries and benefits can be deducted as long as the employee is not one of the owners (with the exception of S-Corp officers), the salary is reasonable for the work being provided, and the service or work is actually provided.
  11. Business Meals
    1. You can deduct 50% of meals that have a legitimate business purpose. However, business meals do not include food and beverages purchased from convenience stores, meals purchased for solo lunch breaks or while working, or personal groceries and meals.
  12. Supplies and Equipment
    1. This includes everything from a box of paper clips to a workbench or computer and everything in between. Even the small expenses can add up through the year and result in significant savings.
  13. Retirement Contributions
    1. As self-employed individuals, small business owners are responsible for planning for their own retirement. Luckily, contributions to retirement accounts are typically made pre-tax, meaning the amounts you contribute go toward lowering your total taxable income! While not a direct expense to the business itself, it is a way business owners can reduce their personal tax liability once their business becomes profitable.
  14. Website & Software
    1. This includes subscriptions, fees, plugins, maintenance, updates, and any other expenses associated with your business website or software.
Remember, our team is here for you! If you have questions, reach out to your tax accountant or guide. In addition, our team can help capture your deductions, categorize your transactions, and save you the most possible on your tax return.

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