Deductible Business Expense

Tax

A deductible business expense must be both 'ordinary' (common in your industry) and 'necessary' (helpful to the business). Categories: advertising, supplies, professional services, software, contractor payments, business travel, business meals (50% deductible), insurance, office expenses, equipment, mileage, education, taxes and licenses. Personal expenses are never deductible — keep separate business bank accounts and credit cards to maintain clear records. Document expenses with receipts and a clear business purpose. The IRS scrutinizes vehicle, meal, entertainment, and home office deductions most heavily. Use accounting software (QuickBooks, Wave, Xero) to track expenses continuously rather than at year-end.