Below are IRS common examples of categorizations.
Remember, only business expenses can be deducted.
- Anything you do to promote your business
- SEO, online advertising or website costs
- Purchased email lists for sales
- Manufacturing expenses of promotional items
- Printing costs for banners
- Other people you pay and normally send a 1099 (you can deduct the expense even if you paid less than $600 each)
Car and Truck
- Gasoline, oil, repairs, insurance, registration, license plates etc.
Income Tax Paid
- Income tax you have paid already (maybe for a prior quarter) for your self-employed income.
- Insurance you carry strictly to protect the business (such as general liability business insurance, fire, theft and accident)
- A mortgage on any property for business use
- Loans on your personal home that funded your business
- Note: Interest you paid on these loans is deductible. Reference the total listed on the 1098 form you receive from your lender.
Legal Fees (Professional Fees)
- Legal, accountant, doctor, graphic designer or other professional, along with their fees
- Postage, paper, envelopes and pens
- Other miscellaneous supplies the business consumes can be claimed on line 22. For example:
- Toilet paper, cleaning supplies, coffee for employees and customers, small hand tools or first aid kits
- Technical manuals or small equipment that will need to be replaced every couple of years
- Note: Because this line has a broad definition, be careful not to keep receipts for all items in this category.
Meals and Entertainment
- Business meal expenses are deductible only if they are (a) directly related to or associated with the active conduct of your trade or business, (b) not lavish or extravagant, and (c) incurred while you or your employee is present at the meal. Rent or lease (business property)
Rental Car and Equipment
- Amounts paid to rent or lease vehicles, machinery, or equipment
- Amounts paid to rent or lease other property, such as office space in a building
- The repair or maintenance of your machinery, property or buildings that don’t actually add to their value
Taxes and Licenses
- Licenses or regulatory fees
- Real estate taxes for your personal or business holdings
- Costs associated with a business trip can be claimed on line 24a. For example:
- Hotel, plane ticket, taxi fares, parking, tips and more
- Important: The IRS frequently audits business travel. Keep your receipts for all these items.
- These can include gas, electricity and phone