What business expenses can I actually deduct?
Every dollar you legitimately deduct is a dollar you don’t pay tax on, which is exactly why this question matters so much. Here’s a plain-English look at what typically qualifies, what doesn’t, and how to make sure you never miss one.
The rule that decides everything
That’s the IRS’s core test. A deductible expense has to be ordinary (common in your line of work) and necessary (helpful for running it). Clear both and it’s usually deductible. The tricky ones are part-business, part-personal, a phone, a car, a home office, which you can deduct only for the business-use portion, and only with records to back it up.
Common deductible business expenses
These qualify for a great many businesses. Yours may have more, depending on your industry:
Home office
The business-use portion of your home, if you use a space regularly and exclusively for work.
Vehicle & mileage
Business miles or the business share of actual vehicle costs, with a log to support it.
Supplies & equipment
Tools, materials, computers, and gear you use to do the work.
Software & subscriptions
Apps, tools, and services you pay for to run the business.
Professional services
Fees for your accountant, attorney, contractors, and consultants.
Marketing & advertising
Your website, ads, printing, and promotion costs.
Insurance
Business insurance premiums, and sometimes health insurance if you qualify.
Travel
Airfare, lodging, and transport for legitimate business trips.
Education
Courses and training that maintain or improve skills for your current business.
Bank & merchant fees
Business account fees, payment processing, and interest on business loans.
Grab the Small Business Tax Deduction Checklist
We put together a free checklist of deductions business owners commonly miss, so you can go line by line and make sure you’re not leaving money on the table. It’s a quick way to spot write-offs you may have overlooked.
Get the free checklistWhat you generally can’t deduct
Just as useful to know what’s off the table. Purely personal expenses never qualify, and a few things trip people up regularly:
Personal living costs, commuting from home to a regular workplace, clothing suitable for everyday wear (even if you only wear it for work), political contributions, and anything without a clear business purpose. Some expenses, like meals, are only partially deductible and need documentation of the business reason.
Why you miss deductions (and how to stop)
Here’s what quietly costs business owners money: you can only deduct what you’ve tracked. The usual reason people overpay isn’t the rules, it’s expenses slipping through, a lost receipt, a miscategorized purchase, a business cost paid on a personal card that never hits the books. Clean, current bookkeeping fixes that: when every transaction is captured and categorized through the year, so are your deductions, all of them, not just the ones you remember at tax time.
Make sure you’re capturing every deduction
A $97 QuickBooks Online Health Check shows whether your books are set up to capture the write-offs you’re entitled to, or we can talk through what you need.
This article is general information, not tax advice. Deduction rules have specific requirements and limits, and what applies depends on your situation. Confirm your deductions with a qualified tax professional.