What Business Expenses Are Tax Deductible?
Business owners who don't track their deductions overpay taxes by thousands of dollars every year. Here's what you can legally deduct.
General information, not professional advice — see terms of use.
The IRS allows deductions for business expenses that are 'ordinary and necessary.' These include:
Home office: $5/sq ft (up to 300 sq ft = $1,500 max) using the simplified method, or actual expenses proportional to office square footage if that's higher.
Vehicle: Standard mileage rate (67 cents/mile in 2024) or actual expenses × business use percentage. Keep a mileage log.
Equipment and technology: Computers, phones, tools. Section 179 allows full cost deduction in year of purchase.
Software and subscriptions: Business software, SaaS tools, industry publications.
Marketing: Website costs, online ads, business cards, trade shows.
Professional services: Accountant, attorney, consultant fees.
Insurance: Business liability, professional liability, property insurance premiums.
Meals: 50% of business meals where business is discussed (keep records of attendees and purpose).
Health insurance: 100% of premiums if you're self-employed.
Education: Courses and books directly related to your current business.
Follow-up questions
Can I deduct my cell phone as a business expense?
Yes, but only the percentage used for business. If 60% business use, deduct 60% of your bill and 60% of the phone's cost. A separate business phone allows 100% deduction.
What is the difference between a tax deduction and a tax credit?
A deduction reduces your taxable income. A $1,000 deduction saves $220 in taxes in the 22% bracket. A credit directly reduces your tax bill dollar-for-dollar — a $1,000 credit saves $1,000 regardless of your bracket. Credits are significantly more valuable.
What records do I need to keep for business deductions?
Keep receipts for all business expenses, bank and credit card statements, mileage logs, records of business purpose for meals, and documentation for any asset purchases. The IRS requires records to be kept for at least 3 years from the date you filed the return.
More small business answers
This page is general information, not professional advice, and it may not reflect the latest rules where you live. For your own situation, talk to a qualified adviser. Spotted an error? Email per@upperia.se and we will fix it.