Guide to IRS Deductible Business Expenses

  • Expenses

Table of Contents

List of Expenses that are typically Tax Deductibles

This is a list of expenses that are typically deductible business expenses for small businesses and startups…

Expense Category Examples
Office Supplies Pens, paper, staplers, printer ink, business cards
Equipment Computers, printers, office furniture, machinery
Travel Airfare, hotels, rental cars, meals during business trips
Vehicle Expenses Mileage, fuel, maintenance, parking fees
Home Office  Portion of rent/mortgage, utilities, insurance
Professional Services Legal fees, accounting services, consulting
Marketing and Advertising Online ads, billboards, promotional materials
Insurance Business liability, health insurance for employees
Meals and Entertainment Client dinners, office parties (50% deductible)
Education and Training Courses, workshops, conferences related to business
Rent Office space, equipment rentals
Utilities Electricity, water, internet, phone services
Employee Salaries Wages, bonuses, benefits
Software and Subscriptions Accounting software, industry-specific tools
Startup Costs Market research, product development, business formation fees
Interest and Bank Fees Business loan interest, credit card fees
Depreciation Write-offs for long-term assets
Bad Debt Uncollectible invoices from customers
Taxes and Licenses Business licenses, permits, property taxes
Repairs and Maintenance Office repairs, equipment maintenance

Common Tax Deductible Questions we often get asked:

  • Is Business/Office Rent Tax Deductible?
  • Are Groceries Tax Deductible for Business?
    • No
  • Are Late Fees Tax Deductible for Businesses?
    • Yes
  • Is Office Space Tax Deductible?
    • Yes

List of Non-Deductible Expenses

See our list of non-deductible business expenses

Category Non-Deductible Expenses
Personal Personal clothing, residential landline telephone, commuting costs…
Entertainment Client entertainment (e.g., concerts, sporting events)…
Travel Expenses for accompanying guests on business trips…
Legal & Fines Penalties, traffic tickets, fines imposed by government agencies…
Political Lobbying expenses, political contributions, campaign expenses…
Insurance Life or disability insurance premiums (if the business is the beneficiary)…
Commuting Daily travel between home and workplace…
Luxury Items Extravagant purchases not essential for business operations…
Home Office Mortgage payments, property taxes (unless meeting specific criteria)…
Miscellaneous Volunteer hours, personal hobbies, expenses for activities without profit motive…

Small Business Expenses List

Equipment and Technology Office computers, software licenses, printers, phones, and industry-specific tools. Monthly subscriptions for cloud storage, project management platforms, and communication apps also fall here.

Marketing and Advertising Website development costs, social media advertising, print materials, trade show participation, and content creation expenses. Email marketing platforms and SEO tools count too.

Professional Services Legal fees, accounting services, consulting costs, and professional development. Tax preparation and business licensing fees belong in this category.

Utilities and Office Costs Electricity, internet, phone services, rent, and office supplies. If you work from home, a portion of these utilities may qualify as business expenses.

Business Expense Categories

Operating Expenses Day-to-day costs that keep your business running. Rent, utilities, insurance, and regular maintenance fall here.

Capital Expenses Large purchases that provide long-term value. Equipment, vehicles, furniture, and major software purchases qualify.

Variable Expenses Costs that change based on business activity. Raw materials, shipping, commission payments, and seasonal labor expenses.

Fixed Expenses Regular, predictable costs that stay consistent. Insurance premiums, loan payments, and monthly software subscriptions.

Business Expenses Examples

Travel and Transportation Airfare for business trips, hotel stays, rental cars, mileage on personal vehicles, and meal expenses during travel.

Employee-Related Costs Salaries, health insurance, retirement contributions, training programs, and team-building activities.

Inventory and Supplies Raw materials, finished goods for resale, packaging materials, office supplies, and cleaning products.

Financial and Insurance Bank fees, credit card processing costs, business insurance premiums, and interest on business loans.

Can Quickbooks manage expenses?

For CPA firms and their clients, QuickBooks provides an indispensable solution for managing expenses, transforming a traditionally tedious process into a streamlined, accurate, and collaborative one. By seamlessly integrating with bank accounts and credit cards, QuickBooks automatically imports and categorizes transactions, eliminating manual data entry and a significant source of error. The platform’s ability to capture and digitize receipts, track mileage, and manage vendor bills allows for a comprehensive, real-time view of a business’s financial health. This level of organization not only simplifies day-to-day bookkeeping but also provides CPAs with clean, reliable data for creating precise financial reports and maximizing tax deductions, ultimately enabling them to offer more strategic, value-added advice to their clients.

R&D Offer Quiz

Step 1 of 3

Answer to find out if you're eligible for R&D tax credits.

Do the activities performed relate to a new or improved business component’s function, performance, reliability, quality, or composition?(Required)
For Example: A mid-sized packaging company develops a slightly modified cardboard box design to improve its stacking strength (reliability) for warehouse storage, involving minor adjustments to the corrugation pattern to reduce collapse under standard weight loads.
Is your company trying to discover information to eliminate uncertainty concerning the capability or method for developing or improving a business component?(Required)
For Example: A furniture manufacturer investigates whether a cheaper wood adhesive can hold joints as effectively as the current one during assembly, testing bond strength to resolve doubts about its capability in standard production lines.
Do the activities performed constitute a process of experimentation?(Required)
For Example: An auto parts supplier runs a series of bench tests on different lubricant formulations to find one that reduces friction in engine bearings more effectively, systematically comparing wear rates over simulated operating cycles.