Overview
Legitimate, ordinary and necessary business expenses are deductible. Tracking them well reduces your taxable profit.
Deduction list
- Software subscriptions
- Office supplies & postage
- Advertising & marketing
- Website hosting & domains
- Professional fees (CPA, attorney)
- Education & training
- Insurance (general liability, E&O)
- Rent and utilities
- Home office (if eligible)
- Phone & internet (business portion)
- Equipment & furniture (179/bonus/dep.)
- Bank & payment processing fees
- Travel, meals (50%)
- Vehicle expenses
- Contractors (1099-NEC)
- Employee wages & payroll taxes
- Retirement plan contributions
- Health insurance premiums (owners/employees)
- Business licenses & permits
- State & local business taxes
- Charitable contributions (C‑Corp; limited for pass‑throughs)
- Bad debts (if using accrual)
- R&D and energy credits (if eligible)
- Depreciation & amortization
- Merchant chargebacks/fraud losses (case‑by‑case)
Recordkeeping & proof
Keep invoices, receipts, bank statements, and mileage logs. Note the business purpose for bigger items and meals.
Common pitfalls
- Mixing personal and business expenses.
- Not allocating the business-use portion for mixed expenses (phone, internet).
- No contemporaneous logs for mileage or travel.