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Tax write-offs for small business: Is it deductible?

Can I write this off? Search or tap something your business spends money on. You'll get a straight answer for the 2026 tax year, what to keep as proof and the mistake people make most.

General information, not tax advice. Answers are written for small business owners and the self-employed.

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Everything else, by topic

59 expenses in all. Open a topic, then tap an expense for the full answer.

Home and workspace

6

Home office

Partly

Partly

If a specific spot in your home is used only and regularly for your business, and it's your main place of work (or where you meet clients), part of your home costs counts. The easy way: $5 per square foot, up to 300 square feet.

For example: Priya, a bookkeeper, works in a 150-square-foot spare room she uses only for work. With the easy method, that's 150 × $5 = $750.

What to keep as proof

  • Measurements of your office and your whole home
  • Photos showing the space is only used for work
  • Your home bills and receipts, if you use the regular method

Common mistake

Calling a corner of the guest room or the kitchen table an office. The space has to be used only for work, and regularly.

For your accountant
Technical answer
Depends on the facts
The rule
You can deduct part of your home costs if a specific area is used regularly and exclusively for your business and is your principal place of business (or where you meet clients). Use the simplified method ($5 per square foot) or the regular method (your business-use percentage of actual home costs, on Form 8829).
Limits
Simplified method: $5 per square foot, up to 300 square feet, so $1,500 at most. Either method can't exceed the gross income from the business use of your home minus your other business expenses; under the regular method the excess carries over to the next year, under the simplified method it doesn't.
Records
Measurements or a floor plan of the office and the whole home, photos showing exclusive use, and the bills, receipts and canceled checks for every home expense you deduct (and your home's basis if you claim depreciation).
Who it applies to
Self-employed people. W-2 employees can't claim a home office deduction.

Official sources

Related MFA tools

General information, not tax advice. Not sure about yours? Talk it through with us.

Office rent

Yes

Yes

Rent for an office, shop, studio or storefront you use for your business counts in full.

For example: Lena rents a salon suite for $900 a month. All $10,800 for the year is a business expense.

What to keep as proof

  • The signed lease
  • Monthly invoices or statements
  • Proof you paid

Common mistake

Writing off rent on your own home as office rent. Home costs only count through the home office rules.

For your accountant
Technical answer
Deductible
The rule
Rent you pay for office, retail or other business space is deductible in the year it applies to. Rent for vehicles, machinery and equipment is deductible too, for the business share of use.
Limits
No dollar limit. For rented vehicles, machinery and equipment, only the business share of use counts.
Records
The signed lease, monthly invoices or statements, and proof of payment.
Who it applies to
Sole proprietors and single-member LLCs (Schedule C); the same rule generally applies to partnerships and corporations.

Official sources

Related MFA tools

General information, not tax advice. Not sure about yours? Talk it through with us.

Coworking space or shared desk

Yes

Yes

A coworking membership, desk rental or meeting room you book for work counts as rent for business space. If the membership bundles in personal perks like a gym, only the business part counts.

For example: Marcus, a consultant, pays $250 a month for a hot desk. That's $3,000 a year he can write off.

What to keep as proof

  • Your membership agreement
  • Monthly invoices and proof you paid
  • A quick note of what you use the space for

Common mistake

Writing off the whole membership when it bundles in personal perks like a gym. Only the business part counts.

For your accountant
Technical answer
Deductible
The rule
A coworking membership, desk rental or meeting-room booking used for your business is rent for business space and is deductible.
Limits
Only the business share counts if part of the membership is for personal use (for example, a gym or social perks bundled in).
Records
Membership agreement, monthly invoices and proof of payment. A short note of what the space is used for helps.
Who it applies to
Sole proprietors and single-member LLCs (Schedule C); the same rule generally applies to partnerships and corporations.

Official sources

General information, not tax advice. Not sure about yours? Talk it through with us.

Utilities (electric, gas, water)

Partly

Partly

For a shop, office or studio, yes. For your home, only through the home office deduction: the work-space share of the bills counts if you use the regular method.

For example: Sofia's bakery has its own electric bill, so all of it counts. Her home electric bill counts only for the share of her home that's a qualifying office.

What to keep as proof

  • Utility bills and proof you paid
  • Your square-footage math, if it's for a home office

Common mistake

Writing off the whole home electric or gas bill. At home, only the office's share counts, and only with the regular home office method.

For your accountant
Technical answer
Depends on the facts
The rule
Utilities for a business location (an office, shop or studio) are deductible. Utilities for your home are deductible only through a home office deduction, as part of your business-use percentage under the regular method.
Limits
No dollar limit for a business location. At home, only the business-use share counts, and the home office income limit applies.
Records
Utility bills and proof of payment; for a home office, your square-footage calculation.
Who it applies to
Sole proprietors and single-member LLCs (Schedule C); the same rule generally applies to partnerships and corporations.

Official sources

Related MFA tools

General information, not tax advice. Not sure about yours? Talk it through with us.

Office supplies and postage

Yes

Yes

Paper, ink, pens, stamps and other supplies you use up in your business count. Things that last well over a year are treated as equipment instead.

For example: Jay, an Etsy seller, spends $40 a month on printer ink and paper. That's $480 a year in write-offs.

What to keep as proof

  • Receipts showing what you bought and when

Common mistake

Lumping a printer or a desk in with supplies. Things that last well over a year are equipment, with their own rules.

For your accountant
Technical answer
Deductible
The rule
Office supplies and postage used in your business are deductible. Materials and supplies are generally deducted as you use them, and items you normally use up within a year can be deducted when bought.
Limits
Items that last substantially longer than a year are generally depreciated instead (or deducted right away under the $2,500 small-purchase rule or Section 179).
Records
Receipts or invoices showing what you bought and when.
Who it applies to
Sole proprietors and single-member LLCs (Schedule C); the same rule generally applies to partnerships and corporations.

Official sources

General information, not tax advice. Not sure about yours? Talk it through with us.

Work clothes and uniforms

Usually not

Usually not

Only if your work requires it and it isn't something you could wear as everyday clothing, like protective gear, scrubs or a uniform you wouldn't wear outside work. Regular clothes don't count, even if you only wear them for work.

For example: An electrician's safety boots and protective gloves count. A stylist's black outfits for the salon don't, because they could be worn anywhere.

What to keep as proof

  • Receipts
  • A note of why your work requires it (photos help)

Common mistake

Writing off clothes you could wear outside work, like a suit or black pants, even if you only wear them for work.

For your accountant
Technical answer
Depends on the facts
The rule
Clothing is deductible only if your work requires it and it isn't suitable for ordinary street wear, such as protective gear or a uniform you wouldn't wear outside work. Everyday clothes are personal, even if you only wear them for work.
Limits
No dollar limit. The test is objective: if the item could be worn as ordinary street clothing, it doesn't qualify, however you actually use it.
Records
Receipts, plus a note of why the item is required for your work and not suitable for everyday wear (photos help).
Who it applies to
Self-employed people.

Official sources

General information, not tax advice. Not sure about yours? Talk it through with us.

Car and travel

5

Car mileage (standard rate)

Partly

Partly

Yes for business driving, never for your commute. The easy way: multiply your business miles by the IRS rate, 72.5 cents a mile for January to June 2026 and 76 cents from July to December. Business parking and tolls count on top.

For example: Tom, a handyman, drives 4,000 business miles to clients and supply stores between January and June. That's 4,000 × $0.725 = $2,900.

What to keep as proof

  • A mileage log kept as you go: date, where, why and how many miles
  • Your odometer reading at the start and end of the year

Common mistake

Counting the drive from home to your regular shop or office. That's commuting, and it never counts.

For your accountant
Technical answer
Partly deductible
The rule
Deduct your business miles times the IRS standard mileage rate instead of tracking actual car costs. Business miles are trips to clients, between work locations and for business errands, never the commute.
Limits
2026 business rate: 72.5 cents a mile for Jan. 1 to June 30 and 76 cents a mile for July 1 to Dec. 31 (2025: 70 cents). You must choose the standard rate in the first year you use a car you own for business; with five or more cars used at the same time you can't use it. Business parking and tolls are deductible on top.
Records
A mileage log kept as you go: date, destination, business purpose and miles for each trip, plus total miles for the year and odometer readings.
Who it applies to
Self-employed people who own or lease the car. W-2 employees generally can't deduct unreimbursed car costs.

Official sources

Related MFA tools

General information, not tax advice. Not sure about yours? Talk it through with us.

Car expenses (actual costs)

Partly

Partly

Instead of the mileage rate, you can write off the work share of what your car really costs: gas, repairs, tires, insurance, registration, and depreciation or lease payments. If 70% of your miles are for work, 70% of those costs count.

For example: Ana drove 10,000 miles this year, 7,000 of them for her cleaning business. With $6,000 in car costs, 70% counts: $4,200.

What to keep as proof

  • Every car receipt: gas, repairs, insurance
  • Your purchase or lease papers
  • A mileage log with work miles and total miles

Common mistake

Writing off 100% of a car you also drive personally, with no mileage log to back up your work percentage.

For your accountant
Technical answer
Partly deductible
The rule
Instead of the standard rate, you can deduct the business share of what the car actually costs: gas, oil, repairs, tires, insurance, registration, licenses and depreciation or lease payments. If you also drive it personally, only the business-use percentage counts.
Limits
Business-use percentage = business miles divided by total miles. Depreciation is subject to the yearly limits for passenger cars; a heavy SUV's Section 179 deduction is capped at $32,000 for tax years beginning in 2026 ($31,300 in 2025).
Records
Every receipt for car costs, the purchase or lease papers, and a mileage log showing business and total miles.
Who it applies to
Self-employed people. W-2 employees generally can't deduct unreimbursed car costs.

Official sources

Related MFA tools

General information, not tax advice. Not sure about yours? Talk it through with us.

Parking and tolls

Yes

Yes

Parking and tolls on business trips count, on top of mileage or actual car costs. Parking at your own regular workplace doesn't, because that's commuting.

For example: Visiting a client downtown, Raj pays $18 to park and $6 in tolls. Both count.

What to keep as proof

  • Receipts or toll statements
  • A matching note in your mileage log

Common mistake

Writing off the monthly spot at your own office or shop. That's part of your commute.

For your accountant
Technical answer
Deductible
The rule
Parking fees and tolls for business trips are deductible on top of either the standard mileage rate or actual expenses.
Limits
Parking at your own regular place of business is a commuting cost and isn't deductible.
Records
Receipts or toll statements, matched to trips in your mileage log.
Who it applies to
Self-employed people; employees only in limited cases.

Official sources

Related MFA tools

General information, not tax advice. Not sure about yours? Talk it through with us.

Business travel (flights, hotels)

Yes

Yes

Yes, when work takes you away from home overnight: flights, hotels, rides and taxis there, baggage and laundry. Meals on the trip count at half. A trip that's mainly a vacation doesn't count.

For example: A photographer flies to Chicago for a three-day wedding shoot. Her flight, hotel and rides count, and her meals count at half.

What to keep as proof

  • Hotel receipts and any receipt of $75 or more
  • The dates, where you went and the business reason

Common mistake

Writing off a family vacation because you took a few work calls. The trip has to be mainly for business.

For your accountant
Technical answer
Deductible
The rule
The normal, needed costs of traveling away from your tax home overnight for business are deductible: transportation, lodging, taxis or rideshare at the destination, baggage, laundry and business calls. Meals on the trip are 50% deductible.
Limits
The trip has to take you away from your tax home (the general area of your main place of business) longer than a normal workday, needing sleep or rest. A trip that is mainly personal is a personal expense.
Records
Receipts for lodging and anything $75 or more, plus the dates, destination and business purpose of the trip.
Who it applies to
Self-employed people. W-2 employees generally can't deduct unreimbursed travel.

Official sources

General information, not tax advice. Not sure about yours? Talk it through with us.

Meals while traveling

Partly

PartlyCounts at half (50%)

Meals while you're away overnight on business count at 50%. Keep your receipts, or use the IRS daily meal allowance for the area instead.

For example: On a two-day trip to a trade show, Kim spends $120 on meals. She can write off $60.

What to keep as proof

  • Meal receipts, or with the daily allowance, the dates, place and reason for the trip

Common mistake

Writing off 100% of meals on the road. They count at half.

For your accountant
Technical answer
Partly deductible
The rule
Meals while you're traveling away from home on business are generally 50% deductible. You can deduct actual costs or use the standard meal allowance for the area instead of keeping meal receipts.
Limits
50% of the cost (80% for workers subject to Department of Transportation hours-of-service limits, such as long-haul truck drivers).
Records
Receipts if you deduct actual costs; with the standard meal allowance, records of the time, place and business purpose of the trip.
Who it applies to
Self-employed people traveling overnight for business.

Official sources

General information, not tax advice. Not sure about yours? Talk it through with us.

Food and entertaining

4

Business meals

Partly

PartlyCounts at half (50%)

A meal with a client, customer or business contact counts at 50%, tax and tip included, as long as you're there, it isn't over the top, and there's a real business reason.

For example: Lisa, a realtor, takes a client to lunch for $60 with tip. She can write off $30.

What to keep as proof

  • The receipt (a must for $75 or more)
  • Who you ate with, how you know them and what you talked about
  • Jot it down the same day

Common mistake

Keeping the receipt but not noting who you ate with and why. The receipt alone doesn't show the business reason.

For your accountant
Technical answer
Partly deductible
The rule
A meal with a client, customer or business contact is generally 50% deductible if it isn't lavish, you (or an employee) are there, and it has a business purpose.
Limits
50% of the cost, including tax and tip. Food and drinks at an entertainment event count only if bought separately or listed separately on the bill.
Records
Receipt (required for $75 or more), plus a note of the date, place, who attended, their business relationship to you and what you discussed. Write it down at or near the time.
Who it applies to
Sole proprietors and single-member LLCs (Schedule C); the same rule generally applies to partnerships and corporations.

Official sources

General information, not tax advice. Not sure about yours? Talk it through with us.

Entertainment (tickets, golf, shows)

Usually not

Usually not

Game tickets, golf, concerts and shows don't count, even with a client and a real business reason. Food bought separately at the event can still count as a half-off business meal.

For example: Taking a client to a ball game: the $200 tickets don't count. The $40 of food bought separately counts at half, so $20.

What to keep as proof

  • Receipts for any food bought separately

Common mistake

Writing off game tickets or a round of golf because a client came along. Entertainment doesn't count, even with a real business reason.

For your accountant
Technical answer
Not deductible
The rule
Entertainment is not deductible, even with a clear business purpose. That covers tickets to games and shows, golf, and similar outings with clients or prospects.
Limits
0%. Food and drinks bought separately at an entertainment event, or listed separately on the bill, can still be a 50% business meal.
Records
Keep records anyway if a separately billed meal was involved.
Who it applies to
Sole proprietors and single-member LLCs (Schedule C); the same rule generally applies to partnerships and corporations.

Official sources

General information, not tax advice. Not sure about yours? Talk it through with us.

Staff parties and team events

Yes

Yes

Yes, in full. A holiday party or summer picnic mainly for your team counts 100%, not just half, as long as it's for your staff in general and not only your top earners.

For example: A salon owner throws a $1,200 holiday dinner for her eight stylists. All of it counts.

What to keep as proof

  • Invoices and receipts
  • The date and a guest list showing it was for staff

Common mistake

Counting it at half like a client meal, or inviting only your top earners. A party for your staff in general counts in full.

For your accountant
Technical answer
Deductible
The rule
Recreational and social events mainly for your employees, such as a holiday party or summer picnic, are an exception to the entertainment and 50% meal limits.
Limits
100%, as long as the event is mainly for employees in general rather than for highly compensated employees only.
Records
Invoices and receipts, the date, and a guest list showing it was for staff.
Who it applies to
Businesses with employees.

Official sources

General information, not tax advice. Not sure about yours? Talk it through with us.

Snacks and meals for employees at work

Usually not

Usually not

No, starting in 2026. Snacks, coffee and meals you provide to employees at work are no longer deductible, apart from a few narrow exceptions. Staff parties follow a different rule.

For example: The break-room coffee and snacks for your team don't count from 2026 on.

What to keep as proof

  • Invoices, plus what the food was for, so the right rule is used

Common mistake

Still writing off office snacks and catered team lunches out of habit. That stopped counting in 2026.

For your accountant
Technical answer
Not deductible
The rule
Starting in 2026, an employer can no longer deduct the cost of food and drinks provided to employees through an on-site eating facility, as small (de minimis) perks, or for the employer's convenience. There are narrow exceptions in the law.
Limits
0% for amounts paid or incurred after Dec. 31, 2025. Staff parties and other recreational events mainly for employees follow a different rule.
Records
Invoices, plus what the food was for, so the right rule can be applied.
Who it applies to
Businesses with employees.

Official sources

General information, not tax advice. Not sure about yours? Talk it through with us.

Phone, internet and software

4

Cell phone and phone service

Partly

Partly

The work share of your phone bill counts. If you use your phone 60% for work, you can write off 60% of the bill. The phone itself is equipment and is written off separately.

For example: Mia's phone bill is $80 a month and about 60% of her use is for her design clients. That's $48 a month, or $576 a year.

What to keep as proof

  • Your phone bills
  • A sample month showing how much is work, to back up your percentage

Common mistake

Writing off 100% of a phone you also use for personal calls and apps.

For your accountant
Technical answer
Partly deductible
The rule
The business share of your cell phone plan is deductible. For a home landline, the basic charge for the first line into your home is personal, but business long-distance calls and a second line used only for business are deductible.
Limits
Only the business-use percentage of a mixed-use phone. The phone itself is equipment: deduct it under the $2,500 small-purchase rule (de minimis safe harbor), Section 179 or depreciation.
Records
Phone bills, plus a reasonable basis for your business-use percentage (for example, a sample month of itemized usage).
Who it applies to
Sole proprietors and single-member LLCs (Schedule C); the same rule generally applies to partnerships and corporations.

Official sources

General information, not tax advice. Not sure about yours? Talk it through with us.

Internet service

Partly

Partly

At a business location, all of it counts. At home, only the work share does.

For example: Omar pays $70 a month for home internet and uses about half of it for his bookkeeping business, so about $35 a month counts.

What to keep as proof

  • Monthly bills
  • How you worked out your work percentage

Common mistake

Writing off the whole home internet bill when the whole family uses it too.

For your accountant
Technical answer
Partly deductible
The rule
Internet service for a business location is deductible. At home, only the business share counts, either as part of your home office expenses or based on your business use.
Limits
Only the business-use percentage when you also use it personally.
Records
Monthly bills and how you worked out the business percentage.
Who it applies to
Sole proprietors and single-member LLCs (Schedule C); the same rule generally applies to partnerships and corporations.

Official sources

General information, not tax advice. Not sure about yours? Talk it through with us.

Software and subscriptions

Yes

Yes

Monthly or yearly subscriptions you use for your business, like QuickBooks, Canva, Zoom or Adobe, count. If you also use one personally, only the business share counts.

For example: Jen pays $15 a month for a design app she uses for her Etsy shop. That's $180 a year in write-offs.

What to keep as proof

  • Invoices or receipts
  • The account showing it's used for the business

Common mistake

Mixing personal subscriptions, like streaming or family cloud storage, in with business ones.

For your accountant
Technical answer
Deductible
The rule
Monthly or annual subscriptions to software and online services you use for your business are ordinary business expenses. Software you buy outright and use for more than a year is generally depreciated, though off-the-shelf software can qualify for Section 179 expensing.
Limits
Only the business share if you also use the subscription personally.
Records
Invoices or receipts, and the account showing it's used for the business.
Who it applies to
Sole proprietors and single-member LLCs (Schedule C); the same rule generally applies to partnerships and corporations.

Official sources

General information, not tax advice. Not sure about yours? Talk it through with us.

Laptop or computer

Yes

Yes

Usually yes, for the share you use for work. You can often write off a work laptop all at once (for example, if it costs $2,500 or less), or spread it over a few years.

For example: Chris buys an $1,800 laptop and uses it 90% for his consulting work. He can write off 90%, or $1,620.

What to keep as proof

  • The receipt
  • The date you started using it for work
  • A rough record of work versus personal use

Common mistake

Writing off 100% of a laptop the family also uses. Only the work share counts.

For your accountant
Technical answer
Depends on the facts
The rule
A computer used in your business is a business asset. You can deduct it all at once using the small-purchase rule, called the de minimis safe harbor (if $2,500 or less per item or invoice), Section 179 or 100% bonus depreciation, or depreciate it over several years. If you also use it personally, only the business share counts.
Limits
Since 2018 computers are no longer "listed property," but personal use still reduces the deduction. If business use later falls so it's no longer mainly for business, part of a Section 179 deduction has to be paid back as income (recapture).
Records
The receipt or invoice, the date you started using it for business, and a record of business versus personal use.
Who it applies to
Sole proprietors and single-member LLCs (Schedule C); the same rule generally applies to partnerships and corporations.

Official sources

General information, not tax advice. Not sure about yours? Talk it through with us.

Equipment and bigger buys

5

Equipment and machinery (Section 179)

Yes

Yes

Furniture, machines and other equipment for your business can usually be written off in full the year you start using it, instead of over several years. The write-off can't be more than your business income; any extra moves to next year.

For example: A landscaper buys a $12,000 mower and starts using it in May. If his business income covers it, he can write off all $12,000 this year.

What to keep as proof

  • Invoices
  • The date you started using it
  • How much you use it for work

Common mistake

Expecting it to create a loss. It can't be more than your business income; the extra moves to next year.

For your accountant
Technical answer
Deductible
The rule
Section 179 lets you deduct the cost of qualifying business equipment, furniture and off-the-shelf software in the year you start using it, instead of depreciating it over several years.
Limits
Tax years beginning in 2026: up to $2,560,000, reduced dollar for dollar once qualifying purchases exceed $4,090,000 (2025: $2,500,000 and $4,000,000). Heavy SUVs are capped at $32,000. The deduction can't exceed your taxable income from active business; the excess carries forward.
Records
Invoices, the placed-in-service date, business-use percentage, and Form 4562.
Who it applies to
Businesses of any type that buy qualifying property for active business use.

Official sources

General information, not tax advice. Not sure about yours? Talk it through with us.

Bonus depreciation

Yes

Yes

Most business equipment bought after Jan. 19, 2025 can be written off 100% in the first year. You can also choose to spread it out instead.

For example: A food truck owner buys $20,000 of kitchen equipment in 2026. She can write off all of it on her 2026 return.

What to keep as proof

  • The purchase contract showing the date you bought it
  • Invoices
  • The date you started using it

Common mistake

Claiming it for something you bought but haven't started using yet. It counts from the year you start using it in the business.

For your accountant
Technical answer
Deductible
The rule
Qualified property acquired and placed in service after Jan. 19, 2025 can be written off 100% in the first year through the special depreciation allowance, now permanent under the 2025 tax law (P.L. 119-21). You can elect out, or elect a smaller 40% allowance for the first tax year ending after Jan. 19, 2025.
Limits
100% for property acquired after Jan. 19, 2025. Property acquired before Jan. 20, 2025 and placed in service in 2025 is limited to 40% (60% for certain long-production property and aircraft).
Records
Purchase contracts showing the acquisition date, invoices, placed-in-service date and Form 4562.
Who it applies to
Businesses of any type.

Official sources

General information, not tax advice. Not sure about yours? Talk it through with us.

Small equipment purchases ($2,500 or less)

Yes

Yes

Items that cost $2,500 or less each (or per invoice) can be written off right away instead of over several years, if you choose this rule each year on your tax return.

For example: Tia buys a $1,200 espresso machine for her café. She can write off the full $1,200 this year.

What to keep as proof

  • Invoices
  • The election statement filed with your return (your preparer adds it)

Common mistake

Forgetting to make the choice on your return. It has to be made each year, or a $2,000 item may have to be spread out.

For your accountant
Technical answer
Deductible
The rule
With the small-purchase election (the de minimis safe harbor) you can deduct, rather than depreciate, tangible items that cost $2,500 or less per invoice or item. You make the election each year with a statement attached to your timely filed return.
Limits
$2,500 per invoice or item ($5,000 if you have an applicable financial statement). Items above the limit are depreciated or expensed under Section 179 or bonus depreciation.
Records
Invoices and the election statement filed with your return.
Who it applies to
Businesses of any type, including sole proprietors.

Official sources

General information, not tax advice. Not sure about yours? Talk it through with us.

Tools and small equipment

Yes

Yes

Tools you use up within a year count when you buy them. Bigger, longer-lasting tools are spread over a few years, though many can be written off right away under the small-purchase or equipment rules. If you also use them personally, only the work share counts.

For example: A plumber's drill bits and saw blades count right away. His new $900 pipe threader can usually be written off this year too.

What to keep as proof

  • Receipts or invoices
  • For bigger items, the date you started using them

Common mistake

Writing off tools you mostly use at home. Only the work share counts.

For your accountant
Technical answer
Deductible
The rule
Tools and professional instruments you normally use up within a year can be deducted when bought. Longer-lasting tools are depreciated, unless you deduct them right away under the $2,500 small-purchase rule or Section 179.
Limits
Only the business share if you also use them personally.
Records
Receipts or invoices and, for larger items, the date you started using them.
Who it applies to
Sole proprietors and single-member LLCs (Schedule C); the same rule generally applies to partnerships and corporations.

Official sources

General information, not tax advice. Not sure about yours? Talk it through with us.

Repairs vs. improvements

Yes

Yes

Fixing something to keep it working counts right away. Making it better, bigger or fit for a new use is an improvement, written off over several years. Smaller businesses may be able to write off repairs and improvements on a building right away, up to the lesser of $10,000 or 2% of the building's cost.

For example: Patching a leak in the salon's roof: write it off now. Replacing the whole roof: that's an improvement, written off over time.

What to keep as proof

  • Contractor invoices describing the work
  • Before-and-after photos

Common mistake

Writing off a full renovation as a "repair." If it makes the property better, bigger or fit for a new use, it's an improvement.

For your accountant
Technical answer
Depends on the facts
The rule
Incidental repairs and routine maintenance that keep property in normal working order are deductible. Work that betters, restores or adapts the property to a new use is an improvement: it's capitalized and depreciated.
Limits
Small taxpayer safe harbor: buildings with an unadjusted basis of $1 million or less, if your average gross receipts are $10 million or less, can deduct repairs, maintenance and improvements up to the lesser of $10,000 or 2% of the building's basis.
Records
Contractor invoices describing the work done, before-and-after photos, and any safe harbor election statements.
Who it applies to
Sole proprietors and single-member LLCs (Schedule C); the same rule generally applies to partnerships and corporations.

Official sources

General information, not tax advice. Not sure about yours? Talk it through with us.

Paying people

5

Contractor and freelancer payments

Yes

Yes

What you pay freelancers and contractors for work on your business counts in full. If you pay someone $2,000 or more for services in 2026, you'll usually need to send them a 1099-NEC.

For example: Nina pays a freelance web designer $2,400 to redo her site. All of it counts, and she sends the designer a 1099-NEC.

What to keep as proof

  • A W-9 from each contractor
  • Invoices and proof you paid
  • Copies of the 1099s you file

Common mistake

Paying a contractor without getting a W-9 first. Ask for it before the first payment so the 1099 is easy at year-end.

For your accountant
Technical answer
Deductible
The rule
Payments to independent contractors for work done for your business are deductible as contract labor.
Limits
No deduction limit. For payments made in 2026, you generally must file Form 1099-NEC for anyone you paid $2,000 or more for services (it was $600 for 2025 payments).
Records
A signed Form W-9 from each contractor, invoices, proof of payment and copies of the 1099s you filed.
Who it applies to
Sole proprietors and single-member LLCs (Schedule C); the same rule generally applies to partnerships and corporations.

Official sources

Related MFA tools

General information, not tax advice. Not sure about yours? Talk it through with us.

Employee wages

Yes

Yes

Reasonable pay, salaries and bonuses for your employees count. What you take out for yourself as a sole owner (owner's draws) doesn't.

For example: A salon pays its receptionist $32,000 this year, and all of it counts. The money the owner takes out for herself doesn't.

What to keep as proof

  • Payroll records and W-2s
  • Timesheets
  • Payroll tax filings, kept at least 4 years

Common mistake

Writing off what you take out for yourself as a sole owner as "wages." Owner's draws aren't an expense.

For your accountant
Technical answer
Deductible
The rule
Reasonable wages, salaries and bonuses you pay employees for work actually done are deductible. As a sole proprietor, what you pay yourself (owner's draws) is not a deduction.
Limits
Pay must be reasonable for the services. Reduce the deduction by certain employment credits you claim, such as the work opportunity credit.
Records
Payroll records, Forms W-2 and W-4, timesheets and payroll tax filings. Keep employment tax records at least 4 years.
Who it applies to
Businesses with employees.

Official sources

Related MFA tools

General information, not tax advice. Not sure about yours? Talk it through with us.

Employer payroll taxes

Yes

Yes

Your share as the employer of Social Security, Medicare and unemployment taxes counts. The taxes you hold back from employees' paychecks are part of their pay, not an extra write-off.

For example: Your payroll report lists "employer taxes" each payday. Those count. The amounts taken out of your employees' checks are already part of their wages.

What to keep as proof

  • Payroll tax forms (941 and 940) and state filings
  • Deposit confirmations

Common mistake

Writing off the taxes withheld from employees' pay a second time. They're already part of the wages you wrote off.

For your accountant
Technical answer
Deductible
The rule
The employer's share of Social Security and Medicare taxes, federal unemployment tax (FUTA) and state unemployment contributions are deductible business taxes.
Limits
Only your share as the employer. Taxes you withhold from employees' pay are part of their wages, not a separate deduction.
Records
Forms 941 and 940, state payroll filings and deposit confirmations.
Who it applies to
Businesses with employees.

Official sources

Related MFA tools

General information, not tax advice. Not sure about yours? Talk it through with us.

Employee benefit programs

Yes

Yes

What you pay toward your employees' health plans, group life insurance and dependent care help counts. Your own benefits as a self-employed owner don't go here.

For example: A small landscaping company pays $400 a month toward each worker's health plan. That counts.

What to keep as proof

  • Plan documents
  • Invoices and payment records
  • A list of who was covered

Common mistake

Putting your own health insurance here. As a self-employed owner, yours follows different rules.

For your accountant
Technical answer
Deductible
The rule
Contributions to employee benefit programs, such as accident and health plans, group-term life insurance and dependent care assistance, are deductible.
Limits
Reduce the deduction by any small employer health insurance credit. Benefits for yourself as a self-employed person don't go here. Employer-paid education assistance is excludable for employees up to $5,250 a year.
Records
Plan documents, invoices and payment records, and who was covered.
Who it applies to
Businesses with employees.

Official sources

General information, not tax advice. Not sure about yours? Talk it through with us.

Employee awards and holiday gifts

Yes

Yes

Yes, within limits. Awards for years of service or safety (real items, not cash) count up to $400 per employee a year. Small, low-value holiday gifts count too. Cash and gift cards are treated as wages.

For example: A contractor gives a worker a $300 watch at a team dinner for ten years of service, and it counts as an award. A $100 gift card would be taxable wages instead.

What to keep as proof

  • What you gave, to whom and what it cost
  • The reason and the date you gave it

Common mistake

Handing out gift cards and calling them awards. Cash and gift cards are taxable wages.

For your accountant
Technical answer
Deductible
The rule
Tangible awards for length of service or safety, given as part of a meaningful presentation, are deductible within limits. Occasional low-value holiday gifts (not cash) can count as a small perk that isn't taxed (a de minimis fringe benefit).
Limits
Achievement awards: up to $400 per employee a year, or $1,600 under a qualified plan. Cash, gift cards and similar items never count as achievement awards or small untaxed gifts; they are taxable wages.
Records
What was given, to whom, its cost, the reason for the award and the presentation date.
Who it applies to
Businesses with employees.

Official sources

General information, not tax advice. Not sure about yours? Talk it through with us.

Insurance and health

3

Business insurance

Yes

Yes

Insurance for your business, like general or professional liability, property or workers' comp coverage, counts in full. Health insurance follows its own rules.

For example: A dog groomer's $600-a-year liability policy counts in full.

What to keep as proof

  • The policy's declarations page
  • Invoices and proof you paid

Common mistake

Lumping health or life insurance on yourself in with business insurance. Those follow their own rules.

For your accountant
Technical answer
Deductible
The rule
Premiums for business insurance, such as general or professional liability, property and workers' compensation coverage, are deductible.
Limits
Employee health coverage is an employee benefit program, and your own health insurance follows the self-employed health insurance rules.
Records
Policy declarations pages, invoices and proof of payment.
Who it applies to
Sole proprietors and single-member LLCs (Schedule C); the same rule generally applies to partnerships and corporations.

Official sources

General information, not tax advice. Not sure about yours? Talk it through with us.

Health insurance (self-employed)

Yes

Yes

Usually yes, if you're self-employed and your business made a profit. Health, dental, vision and qualified long-term care premiums for you and your family count, on your personal return. Not for any month you or your spouse could have joined an employer's subsidized plan.

For example: Leo, a freelance writer, pays $450 a month for his own health plan and has no employer plan he could join. If his profit is more than $5,400, all $5,400 counts.

What to keep as proof

  • Premium statements and proof you paid
  • Which months you had coverage
  • Whether you or your spouse could join an employer plan

Common mistake

Claiming it for months when you or your spouse could have joined an employer's subsidized plan, even if you didn't sign up.

For your accountant
Technical answer
Depends on the facts
The rule
If you're self-employed with a profit, you can deduct medical, dental, vision and qualified long-term care premiums for yourself, your spouse and dependents (and a child under 27). It's an adjustment on Schedule 1, not a Schedule C expense, and the plan must be established under your business.
Limits
Can't exceed your net earnings from the business. No deduction for any month you (or your spouse) were eligible for a subsidized employer health plan, even if you didn't enroll. Figured on Form 7206.
Records
Premium statements, proof of payment and which months you had coverage and employer-plan eligibility.
Who it applies to
Sole proprietors, partners with self-employment earnings and more-than-2% S corporation shareholders (through their W-2 wages).

Official sources

Related MFA tools

General information, not tax advice. Not sure about yours? Talk it through with us.

Life insurance premiums

Usually not

Usually not

Life insurance on yourself is personal, and you can't write off premiums when you or your business would get the payout. Group life coverage for employees can count as a benefit.

For example: Sam's $50-a-month term life policy, with his wife as the beneficiary, is a personal cost.

What to keep as proof

  • The policy, showing who owns it and who gets paid

Common mistake

Writing off your own life insurance because the business pays the premium. It's still personal.

For your accountant
Technical answer
Not deductible
The rule
You can't deduct premiums on a life insurance policy when you or your business is directly or indirectly a beneficiary. Premiums on your own personal life insurance are personal.
Limits
Group-term life insurance for employees can be deductible as an employee benefit, but not coverage for yourself as a self-employed person.
Records
The policy, showing the owner and beneficiaries.
Who it applies to
All taxpayers.

Official sources

General information, not tax advice. Not sure about yours? Talk it through with us.

Saving for retirement

3

SEP-IRA contributions

Yes

Yes

Money you put into a SEP-IRA for yourself lowers your taxes, on your personal return. For 2026 the cap is 25% of pay or $72,000, whichever is less, and for the self-employed the math works out a bit lower. You can open and fund it up to your tax deadline, including extensions.

For example: A consultant with a strong 2026 puts $15,000 into her SEP-IRA in March 2027, before filing. It counts for 2026.

What to keep as proof

  • Plan paperwork (for example, Form 5305-SEP)
  • Contribution confirmations
  • How you figured your limit

Common mistake

Assuming you can put in a full 25% of your profit. For the self-employed, the math works out lower.

For your accountant
Technical answer
Deductible
The rule
Contributions to a SEP-IRA for yourself are deductible on Schedule 1, not Schedule C; contributions for employees go on Schedule C. You can set up the plan and contribute as late as your return's due date, including extensions.
Limits
2026: the lesser of 25% of compensation or $72,000 per person (2025: $70,000), with compensation counted up to $360,000 (2025: $350,000). For your own contribution, compensation is net self-employment earnings minus half of SE tax and minus the contribution itself, so the effective rate is lower than 25%.
Records
Plan document (for example, Form 5305-SEP), contribution confirmations and your calculation of the limit.
Who it applies to
Self-employed people and businesses of any size.

Official sources

Related MFA tools

General information, not tax advice. Not sure about yours? Talk it through with us.

Solo 401(k) contributions

Yes

Yes

If it's just you, a solo 401(k) lets you save as both the "employee" and the "employer." For 2026: up to $24,500 as the employee, plus extra if you're 50 or older, and up to $72,000 in total. You claim it on your personal return.

For example: A one-person video editing business puts $24,500 into a solo 401(k) as the employee, plus an employer contribution on top, and claims them on the owner's personal return.

What to keep as proof

  • Plan paperwork
  • Your contribution elections and confirmations
  • How you figured your limit

Common mistake

Forgetting a day-job 401(k). The $24,500 employee limit covers all your 401(k) plans combined.

For your accountant
Technical answer
Deductible
The rule
In a one-participant 401(k) you can contribute as both employee (elective deferrals) and employer (profit-sharing). Contributions for yourself are deducted on Schedule 1, not Schedule C.
Limits
2026: elective deferrals up to $24,500, plus $8,000 catch-up at 50 or older ($11,250 instead at ages 60 to 63). Total employee and employer additions up to $72,000 (more with catch-up). Compensation counted up to $360,000.
Records
Plan document, deferral elections, contribution confirmations and your limit calculation.
Who it applies to
Self-employed people and owner-only businesses.

Official sources

General information, not tax advice. Not sure about yours? Talk it through with us.

Retirement contributions for employees

Yes

Yes

Matches and other contributions you make to your employees' retirement plans count as a business expense.

For example: A dental office matches 3% of each employee's pay into their 401(k). That match counts.

What to keep as proof

  • Plan documents
  • Contribution records
  • Yearly plan filings

Common mistake

Writing off your own contributions here. Yours go on your personal return, not as a business expense.

For your accountant
Technical answer
Deductible
The rule
Contributions you make to a retirement plan for the benefit of your employees are deductible on Schedule C. Contributions for yourself go on Schedule 1 instead.
Limits
Plan limits apply. For 2026, SIMPLE IRA deferrals are up to $17,000 and 401(k) deferrals up to $24,500.
Records
Plan documents, contribution records and annual plan filings.
Who it applies to
Businesses with employees.

Official sources

General information, not tax advice. Not sure about yours? Talk it through with us.

Accountants, lawyers and dues

3

Tax preparation fees

Partly

Partly

The cost of preparing the business part of your return counts. The part for the rest of your personal return doesn't, so ask your preparer to split the bill.

For example: Your preparer charges $600: $400 for the business schedules and $200 for the rest. You write off $400.

What to keep as proof

  • The preparer's invoice showing the business part
  • Proof you paid

Common mistake

Writing off the whole tax prep bill. Only the business part counts.

For your accountant
Technical answer
Partly deductible
The rule
Tax preparation and tax advice fees related to your business are deductible on Schedule C. The part of the fee for the rest of your personal return isn't a business expense.
Limits
Ask your preparer to split the invoice between business schedules and the personal return.
Records
The preparer's invoice showing the business portion, and proof of payment.
Who it applies to
Sole proprietors and single-member LLCs; businesses deduct the cost of their own returns.

Official sources

General information, not tax advice. Not sure about yours? Talk it through with us.

Professional and trade association dues

Yes

Yes

Dues for professional groups, trade associations and the chamber of commerce count. Social clubs, golf clubs and gyms never do.

For example: A home inspector's yearly trade association dues count.

What to keep as proof

  • Membership invoices
  • Any note from the group about the share spent on lobbying, which doesn't count

Common mistake

Filing a gym or country club membership under "dues." Those never count.

For your accountant
Technical answer
Deductible
The rule
Dues to professional organizations, trade associations, business leagues, chambers of commerce, real estate boards and civic or public service groups are deductible, as long as the group's main purpose isn't entertainment.
Limits
The part of dues a tax-exempt group tells you goes to lobbying or political activity isn't deductible. Social, athletic and similar clubs are never deductible.
Records
Membership invoices and any statement from the group showing the nondeductible lobbying share.
Who it applies to
Sole proprietors and single-member LLCs (Schedule C); the same rule generally applies to partnerships and corporations.

Official sources

General information, not tax advice. Not sure about yours? Talk it through with us.

Marketing and gifts

3

Advertising and marketing

Yes

Yes

Ads, business cards, flyers, Google or Instagram ads and other marketing count in full.

For example: An Etsy seller spends $90 a month on ads. That's $1,080 a year in write-offs.

What to keep as proof

  • Invoices and ad platform receipts

Common mistake

Calling a political ad or a campaign donation "advertising." Neither counts.

For your accountant
Technical answer
Deductible
The rule
Advertising and other selling expenses, such as online ads, print ads, business cards, flyers and promotional campaigns, are ordinary business expenses.
Limits
No dollar limit. Political advertising and lobbying are not deductible.
Records
Invoices, ad platform receipts and statements.
Who it applies to
Sole proprietors and single-member LLCs (Schedule C); the same rule generally applies to partnerships and corporations.

Official sources

General information, not tax advice. Not sure about yours? Talk it through with us.

Gifts to clients

Partly

Partly

Up to $25 per person per year. Wrapping, engraving and shipping don't count toward the $25.

For example: Sending a client a $60 gift basket: $25 counts, plus the $12 shipping.

What to keep as proof

  • Receipts
  • Who got it, what it was, the cost and the date
  • How they're connected to your business

Common mistake

Writing off the full price of a pricey gift. Only $25 per person per year counts.

For your accountant
Technical answer
Partly deductible
The rule
Business gifts to clients, customers and referral partners are deductible, but only up to $25 per person per year.
Limits
$25 per recipient per year. Incidental costs such as engraving, packaging, gift wrapping, insuring and mailing don't count toward the $25.
Records
Receipts, the date, a description and cost of each gift, the recipient's name and their business relationship to you.
Who it applies to
Sole proprietors and single-member LLCs (Schedule C); the same rule generally applies to partnerships and corporations.

Official sources

General information, not tax advice. Not sure about yours? Talk it through with us.

Branded promotional items

Yes

Yes

Low-cost items with your logo that you hand out widely, like pens or keychains, aren't treated as gifts, so the $25 limit doesn't apply. They need to cost $4 or less each.

For example: A realtor orders 500 logo pens at $1 each. All $500 counts.

What to keep as proof

  • Invoices showing the cost per item and how many

Common mistake

Treating a nice logo jacket for one client as a promo item. Over $4 each, it's a gift with the $25 limit.

For your accountant
Technical answer
Deductible
The rule
Low-cost items with your business name clearly and permanently imprinted, handed out widely (pens, keychains, desk sets and the like), don't count as gifts, so the $25 limit doesn't apply.
Limits
Items must cost $4 or less each and be one of a number of identical items you distribute widely. Pricier items given to a person count toward the $25 gift limit.
Records
Invoices showing the unit cost and quantity.
Who it applies to
Sole proprietors and single-member LLCs (Schedule C); the same rule generally applies to partnerships and corporations.

Official sources

General information, not tax advice. Not sure about yours? Talk it through with us.

Courses and learning

1

Courses, training and conferences

Yes

Yes

Yes, if it keeps up or improves skills for the work you already do. Not if it trains you for a new line of work, or covers the basic requirements to get into your field.

For example: A licensed esthetician takes a $400 advanced skincare course, and it counts. Going to beauty school to get licensed in the first place doesn't.

What to keep as proof

  • Receipts
  • The course description or agenda
  • A note of how it relates to your current work

Common mistake

Writing off a degree or licensing course for a new line of work.

For your accountant
Technical answer
Depends on the facts
The rule
Education that maintains or improves skills you need in your current business, or is required by law to keep your status, is deductible. Education that qualifies you for a new trade or business, or meets the minimum requirements to enter your field, isn't.
Limits
No dollar limit for qualifying education. Books and materials you normally use within a year can be deducted when bought. Travel to a qualifying course follows the travel rules, and meals are 50%.
Records
Receipts, course descriptions or agendas, and a note of how the course relates to your current work.
Who it applies to
Self-employed people. Employers can also provide employees up to $5,250 a year of excludable educational assistance.

Official sources

General information, not tax advice. Not sure about yours? Talk it through with us.

Bank fees, loans and unpaid bills

3

Bank and card processing fees

Yes

Yes

Fees on your business bank account, wire fees and the cut Stripe, Square or PayPal takes from your sales all count.

For example: Square keeps $300 in fees from a hairdresser's card sales this year. That $300 is a write-off.

What to keep as proof

  • Bank and processor statements (they show the fees)

Common mistake

Reporting only what lands in the bank. If Stripe or Square takes its fees first, report the full sales and write off the fees.

For your accountant
Technical answer
Deductible
The rule
Monthly fees on a business bank account, wire fees and the fees payment processors take from your sales are normal business expenses you can deduct.
Limits
Only fees on business accounts and transactions. Fees on personal accounts are personal.
Records
Bank and processor statements (they show the fees taken).
Who it applies to
Sole proprietors and single-member LLCs (Schedule C); the same rule generally applies to partnerships and corporations.

Official sources

General information, not tax advice. Not sure about yours? Talk it through with us.

Interest on business loans and credit cards

Partly

Partly

Interest on money borrowed for your business counts. On a card or loan used for both business and personal spending, only the business share counts.

For example: Mo borrows $10,000 to buy a used van for his moving business. The interest on that loan counts. Interest on his personal shopping doesn't.

What to keep as proof

  • Loan agreements and statements
  • Records of what the borrowed money paid for

Common mistake

Writing off all the interest on a card or loan you also use personally. Only the business share counts.

For your accountant
Technical answer
Partly deductible
The rule
Interest on money borrowed for your business is deductible. Interest is allocated by how the borrowed money was used, so on a card or loan used for both, only the business share counts. Personal interest isn't deductible.
Limits
Small businesses that meet the gross receipts test ($32 million average for tax years beginning in 2026; $31 million in 2025) are exempt from the business interest limit. Larger businesses may be limited.
Records
Loan agreements, Forms 1098 and statements, and records tracing how loan proceeds were spent.
Who it applies to
Sole proprietors and single-member LLCs (Schedule C); the same rule generally applies to partnerships and corporations.

Official sources

General information, not tax advice. Not sure about yours? Talk it through with us.

Unpaid invoices (bad debts)

Usually not

Usually not

Usually not for small businesses. If you never counted the unpaid invoice as income (most small businesses don't until they're paid), there's nothing to write off.

For example: A designer bills $1,500 and the client never pays. She never reported that $1,500 as income, so there's no deduction, and no tax on it either.

What to keep as proof

  • The invoice and proof it was counted as income
  • Your attempts to collect

Common mistake

Writing off an unpaid invoice you never reported as income. There's nothing to deduct.

For your accountant
Technical answer
Depends on the facts
The rule
A business bad debt is deductible only if the amount was already included in your income. Most small businesses use the cash method, so an unpaid invoice was never income and can't be deducted.
Limits
Deduct it only in the year it becomes wholly or partly worthless, after reasonable collection efforts. Refund claims for bad debts have a 7-year window.
Records
The invoice, proof it was included in income, collection attempts and why it became worthless.
Who it applies to
Mostly accrual-method businesses, and loans or credit sales made in the business.

Official sources

General information, not tax advice. Not sure about yours? Talk it through with us.

Starting a business

2

Startup costs

Partly

Partly

Costs before you open, like market research, pre-launch ads or training, can be written off up to $5,000 in your first year. The rest is spread over 15 years.

For example: Before opening her bakery, Rosa spends $8,000 on research, ads and training. She writes off $5,000 in year one and the other $3,000 bit by bit over 15 years.

What to keep as proof

  • Receipts dated before you opened
  • The date your business started

Common mistake

Writing off every pre-opening cost in year one. Only up to $5,000 counts right away.

For your accountant
Technical answer
Partly deductible
The rule
Costs of investigating or setting up a business before it opens (market research, pre-opening advertising, training, consultants) can be deducted up to $5,000 in the year you start, with the rest amortized over 180 months.
Limits
$5,000 deduction, reduced dollar for dollar once total startup costs exceed $50,000 (none at $55,000 or more). The remainder is deducted evenly over 180 months from the month the business starts.
Records
Receipts and invoices dated before opening, and the date the business began.
Who it applies to
Any new active trade or business.

Official sources

Related MFA tools

General information, not tax advice. Not sure about yours? Talk it through with us.

Business formation costs

Partly

Partly

Costs to form a partnership or corporation (including a multi-member LLC), like state filing and legal fees, can be written off up to $5,000 in the first year, with the rest spread over 15 years.

For example: Two friends form an LLC for their cleaning company and pay $1,200 in state and legal fees. All of it can be written off in the first year.

What to keep as proof

  • State filing receipts
  • Lawyer invoices
  • The date the business began

Common mistake

Mixing one-time formation fees in with yearly state fees. Yearly fees are regular expenses; formation costs follow the startup rules.

For your accountant
Technical answer
Partly deductible
The rule
Costs to form a corporation or partnership (including a multi-member LLC), such as state filing fees and legal fees for the organizing documents, can be deducted up to $5,000 in the first year, with the rest amortized over 180 months.
Limits
$5,000, reduced dollar for dollar once these costs exceed $50,000; the remainder over 180 months. Partnership costs to sell ownership interests (syndication costs) aren't deductible.
Records
State filing receipts, attorney invoices and the date the business began.
Who it applies to
Corporations and partnerships, including multi-member LLCs taxed as partnerships.

Official sources

Related MFA tools

General information, not tax advice. Not sure about yours? Talk it through with us.

Products and shipping

2

Inventory and cost of goods sold

Yes

Yes

Products you buy or make to sell count when they sell, not when you buy them. Smaller businesses can often use a simpler method.

For example: A candle maker buys $2,000 of wax and jars and uses $1,500 of it in candles she sells this year. The $1,500 counts now; the rest counts when those candles sell.

What to keep as proof

  • Purchase invoices
  • Inventory counts at the start and end of the year

Common mistake

Writing off a big stock order the day you buy it. Products generally count as they sell.

For your accountant
Technical answer
Depends on the facts
The rule
Products you buy or make to sell aren't deducted when bought. Their cost is deducted as cost of goods sold (Schedule C, Part III) when they are sold. Small businesses that meet the gross receipts test can choose not to keep inventories, under the method in the Schedule C instructions.
Limits
The small business option is available if average annual gross receipts for the prior 3 years are $32 million or less for tax years beginning in 2026 ($31 million for 2025).
Records
Purchase invoices, beginning and ending inventory counts, and your inventory method.
Who it applies to
Businesses that sell products.

Official sources

General information, not tax advice. Not sure about yours? Talk it through with us.

Shipping and postage

Yes

Yes

Shipping orders to customers and business postage count in full.

For example: An Etsy shop spends $300 a month on shipping labels. That's $3,600 a year in write-offs.

What to keep as proof

  • Carrier receipts or account statements

Common mistake

Mixing personal packages in with business shipping.

For your accountant
Technical answer
Deductible
The rule
Postage and the cost of shipping orders to customers are deductible business expenses.
Limits
Only shipments for the business. Postage is reported with office expenses.
Records
Carrier receipts or account statements.
Who it applies to
Sole proprietors and single-member LLCs (Schedule C); the same rule generally applies to partnerships and corporations.

Official sources

General information, not tax advice. Not sure about yours? Talk it through with us.

Taxes and licenses

3

Self-employment tax

Partly

PartlyCounts at half (50%)

You can write off half of your self-employment tax on your personal return. It lowers your income tax, not the self-employment tax itself.

For example: If your self-employment tax is $7,000, you can deduct $3,500.

What to keep as proof

  • Schedule SE and your Schedule C (tax software or your preparer handles this)

Common mistake

Putting it on your business schedule. Half of it is deducted on your personal return instead.

For your accountant
Technical answer
Partly deductible
The rule
Half of your self-employment tax (the employer-equivalent part) is deductible in figuring adjusted gross income, on Schedule 1. It isn't a Schedule C expense and doesn't reduce the SE tax itself.
Limits
50% of SE tax. SE tax is 15.3% on 92.35% of net self-employment earnings, with the Social Security part stopping at the $184,500 wage base for 2026.
Records
Schedule SE and your Schedule C.
Who it applies to
Self-employed people who owe SE tax (net earnings of $400 or more).

Official sources

Related MFA tools

General information, not tax advice. Not sure about yours? Talk it through with us.

Business taxes

Partly

Partly

Property taxes on business assets and some business taxes count. Federal income tax and self-employment tax never do, and sales tax you collect from customers and pass on isn't yours to write off.

For example: The property tax bill on a food truck counts. The owner's federal income tax payments don't.

What to keep as proof

  • Tax bills and proof you paid

Common mistake

Writing off the sales tax you collected from customers. That money was never yours.

For your accountant
Technical answer
Partly deductible
The rule
Deductible: sales taxes imposed on you as the seller, real estate and personal property taxes on business assets, and federal highway use tax. Not deductible: federal income tax (including SE tax), estate and gift taxes, and taxes on personal property.
Limits
Sales tax you pay on property bought for the business is added to its cost. Sales tax imposed on your customers that you collect and pay over isn't deductible.
Records
Tax bills, returns and proof of payment.
Who it applies to
Sole proprietors and single-member LLCs (Schedule C); the same rule generally applies to partnerships and corporations.

Official sources

General information, not tax advice. Not sure about yours? Talk it through with us.

Business licenses and permits

Yes

Yes

Yearly business licenses, permits and state or local regulatory fees count.

For example: A cosmetologist's license renewal and her city business permit both count.

What to keep as proof

  • Receipts and renewal notices

Common mistake

Lumping one-time formation fees in with yearly license fees. Formation costs follow the startup rules.

For your accountant
Technical answer
Deductible
The rule
Licenses and regulatory fees you pay each year to state or local governments for your business are deductible.
Limits
Fees to form an entity follow the startup or organizational cost rules instead.
Records
Receipts and renewal notices.
Who it applies to
Sole proprietors and single-member LLCs (Schedule C); the same rule generally applies to partnerships and corporations.

Official sources

General information, not tax advice. Not sure about yours? Talk it through with us.

Things that usually don't count

7

Commuting

Usually not

Usually not

Getting from home to your regular workplace is personal, however far it is. But if your home office is your main place of business, trips from there to clients or job sites can count.

For example: A barber's daily drive to his shop doesn't count. A consultant who works from a home office and drives to a client's office can count that trip.

What to keep as proof

  • If you claim trips, a mileage log showing they weren't commutes

Common mistake

Thinking a long commute, or taking work calls on the way, makes it business. It doesn't.

For your accountant
Technical answer
Not deductible
The rule
Getting between your home and your regular place of work is commuting, a personal expense, however far it is and even if you work during the trip. That includes parking at your regular workplace.
Limits
0%. Exceptions: trips from a home office that is your principal place of business to other work sites, between two workplaces, and to a temporary work location can be business miles.
Records
If you claim trips as business, a mileage log showing they weren't commutes.
Who it applies to
All taxpayers.

Official sources

Related MFA tools

General information, not tax advice. Not sure about yours? Talk it through with us.

Fines and penalties

Usually not

Usually not

Parking tickets, speeding tickets and IRS penalties can't be written off, even if you got them while working.

For example: A delivery driver's $45 parking ticket on a job doesn't count.

What to keep as proof

  • Nothing for a deduction, unless a court order or settlement names part of it as restitution (see the fine print)

Common mistake

Writing off a parking ticket because you got it on a job.

For your accountant
Technical answer
Not deductible
The rule
Fines and penalties paid to a government for breaking a law aren't deductible, including traffic and parking tickets and tax penalties.
Limits
0%. A narrow exception covers amounts a court order or settlement specifically identifies as restitution or as costs to come into compliance with the law.
Records
The order or settlement, if you rely on the restitution exception.
Who it applies to
All taxpayers.

Official sources

General information, not tax advice. Not sure about yours? Talk it through with us.

Political contributions and lobbying

Usually not

Usually not

Donations to candidates, campaigns and political parties, and most lobbying costs, can't be written off.

For example: A $500 donation to a local candidate from your business account doesn't count.

What to keep as proof

  • Nothing to keep for a deduction

Common mistake

Running a campaign donation through the business as "marketing."

For your accountant
Technical answer
Not deductible
The rule
Contributions to candidates, campaigns and political parties aren't deductible, and neither are most costs of lobbying or trying to influence legislation or elections.
Limits
0%. Part of your trade association dues may also be nondeductible if the group lobbies.
Records
Nothing to keep for a deduction.
Who it applies to
All taxpayers.

Official sources

General information, not tax advice. Not sure about yours? Talk it through with us.

Club memberships

Usually not

Usually not

Country clubs, golf clubs, gyms and other social or athletic clubs don't count, even if you meet clients there. Professional groups and the chamber of commerce are different.

For example: A consultant's golf club membership doesn't count, even if he plays with clients.

What to keep as proof

  • Nothing to keep for a deduction

Common mistake

Calling a country club or golf membership "networking." It still doesn't count.

For your accountant
Technical answer
Not deductible
The rule
Dues for clubs organized for business, pleasure, recreation or other social purposes, such as country clubs, golf and athletic clubs, airline and hotel clubs, aren't deductible.
Limits
0%. Professional and trade associations, chambers of commerce and civic groups are different, and are generally deductible.
Records
Nothing to keep for a deduction.
Who it applies to
All taxpayers.

Official sources

General information, not tax advice. Not sure about yours? Talk it through with us.

Gym and fitness memberships

Usually not

Usually not

Gym, health club and fitness memberships are personal, even if staying fit helps you work. Meeting clients there doesn't change that.

For example: A real estate agent pays $60 a month for a gym where she sometimes meets clients. None of it counts.

What to keep as proof

  • Nothing to keep for a deduction

Common mistake

Writing off a gym membership because staying fit helps you work, or because you sometimes meet clients there.

For your accountant
Technical answer
Not deductible
The rule
Gym, health club and fitness memberships are personal expenses. Dues to athletic clubs and other clubs organized for recreation or social purposes aren't deductible, even if you use them to meet clients.
Limits
0%. Professional and trade associations, chambers of commerce and civic groups are different, and are generally deductible.
Records
None needed for a deduction.
Who it applies to
All taxpayers.

Official sources

General information, not tax advice. Not sure about yours? Talk it through with us.

Personal expenses

Usually not

Usually not

Groceries, your gym, haircuts, vacations and family costs aren't business expenses, even if you pay with the business card. If something is used for both, only the business part counts.

For example: Paying for Netflix or the family groceries from the business account doesn't make them deductible.

What to keep as proof

  • Keep business and personal spending in separate accounts

Common mistake

Paying personal bills from the business account and treating them as business expenses.

For your accountant
Technical answer
Not deductible
The rule
Personal, living and family expenses aren't business deductions, even if paid from a business account. When something is used for both, deduct only the business share.
Limits
0% for the personal part. Paying a personal bill from the business account doesn't make it deductible.
Records
Keep business and personal spending in separate accounts.
Who it applies to
All taxpayers.

Official sources

General information, not tax advice. Not sure about yours? Talk it through with us.

Charitable donations by your business

Usually not

Usually not

Not as a business expense if you're a sole owner. On your personal return they can count if you itemize, and starting in 2026 up to $1,000 in cash gifts ($2,000 for married couples filing jointly) counts even if you don't.

For example: A salon owner gives $500 to a local food bank. It can't go on her business schedule, but it may count on her personal return, even if she doesn't itemize.

What to keep as proof

  • A written receipt from the charity
  • Proof you paid

Common mistake

Putting donations on your business schedule as a sole owner. They belong on your personal return.

For your accountant
Technical answer
Not deductible
The rule
A sole proprietor or single-member LLC can't deduct charitable contributions as a business expense on Schedule C. They may be deductible on your personal return under the charitable contribution rules.
Limits
Not on Schedule C. On your personal return, itemize on Schedule A, or, starting in 2026, deduct up to $1,000 of qualifying cash gifts ($2,000 married filing jointly) without itemizing. See Publication 526 and Publication 6196.
Records
Written acknowledgments from the charity and proof of payment.
Who it applies to
Sole proprietors and single-member LLCs. Corporations follow their own charitable deduction rules.

Official sources

General information, not tax advice. Not sure about yours? Talk it through with us.

Keep this handy

Email me the 59-expense write-off checklist

A printable PDF of every expense on this page: Yes, Partly or Usually not, plus the proof to keep for each one. Tick off what you spent this year and hand it to whoever does your taxes.

One email with the PDF now, then occasional tax-deadline reminders. Unsubscribe in one click. We never sell or share your address. Privacy Policy.

How the answers work

Each answer starts with Yes, Partly or Usually not, then says why in a sentence or two, what to keep as proof and the mistake people make most. The exact rule, limits, form references and the official source sit under “For your accountant” in every answer.

Answers are written for sole proprietors and single-member LLCs, and most apply the same way to partnerships and corporations. Figures are for the 2026 tax year where the IRS has published them. To see what a deduction is worth, try the home office calculator, the mileage calculator or the 1099 tax calculator.

Reviewed by Zain Merchant, ACCA on Oct. 21, 2026. Facts last checked Oct. 23, 2026.

Building something with this? The full list is published as a dataset at deductions.json. Cite it with a link to this page.

FAQs

The general test: the cost is ordinary (common in your line of work) and necessary (helpful for your business). Personal, living and family costs aren't deductible, and when something is used for both business and personal purposes, only the business share counts. Some expenses also have their own limits, such as the 50% limit on business meals and the $25 limit on gifts.

The normal, needed costs of running your business, reported on Schedule C. Common write-offs include software and supplies, advertising, payments to contractors, business insurance, business travel, a qualifying home office and the business share of your phone, internet and car. Self-employed people can also deduct half of their self-employment tax, self-employed health insurance premiums if they qualify, and contributions to a SEP IRA or solo 401(k); those are claimed on Form 1040 rather than Schedule C.

Generally no. Gym, health club and fitness memberships are personal expenses, and dues to athletic and other social or recreational clubs aren't deductible even if you meet clients there.

Usually not. Business meals with clients and meals while traveling are generally 50% deductible (80% for workers under Department of Transportation hours-of-service limits). Holiday parties and similar events mainly for employees are fully deductible. Starting in 2026, food and drinks an employer provides to employees at work, such as office snacks or on-site meals for the employer's convenience, are no longer deductible.

Commuting between home and your regular workplace, fines and penalties paid to a government (including parking tickets and tax penalties), political contributions and most lobbying, dues for social, athletic and similar clubs, entertainment such as game tickets and golf, and personal, living and family expenses. A sole proprietor's charitable donations aren't a business expense either, though they may be deductible on your personal return: on Schedule A if you itemize, or, starting in 2026, up to $1,000 of cash gifts ($2,000 married filing jointly) if you don't.

Keep receipts, canceled checks and other documents that support each deduction. For travel, meals, gifts and car use, also record the amount, date, place, business purpose and business relationship, and keep receipts for lodging and anything $75 or more. Keep records at least until the period to assess tax runs out, generally 3 years after you file, and employment tax records for at least 4 years.

You often have a choice. Items of $2,500 or less per invoice or item can be deducted under the de minimis safe harbor election. Larger purchases can be expensed under Section 179 (up to $2,560,000 for tax years beginning in 2026) or with 100% bonus depreciation for property acquired after Jan. 19, 2025, or depreciated over several years. The best choice depends on your income this year and in later years, so it's worth running the numbers.

It's written for self-employed people and small businesses. W-2 employees generally can't deduct unreimbursed job costs such as car expenses or a home office.

Every entry was checked against IRS publications, instructions and the Internal Revenue Code (most recently on Oct. 23, 2026), and uses 2026 figures where the IRS has published them. Where a 2026 edition isn't out yet, the latest edition is cited with its year. IRS Publication 535 (Business Expenses) has been discontinued; its topics now live in Publication 334 and the Schedule C instructions.

Official sources

All 39 sources used on this page. IRS Publication 535 (Business Expenses) has been discontinued, so it isn't cited.

IRS publications and instructions

Other IRS guidance

Internal Revenue Code and Treasury Regulations

General information, not tax advice. Tax rules change and depend on your facts, so check with a qualified tax professional before you file. Reviewed by Zain Merchant, ACCA, Oct. 21, 2026. Facts checked against the sources above as of Oct. 23, 2026. Educational information, not tax or legal advice. Results are estimates based on the information you enter; your situation may differ. Using this tool doesn't create a client relationship.

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