✅ Business Tax Deductions

If you run a business—even as a freelancer, side hustler, or sole proprietor—you can deduct ordinary and necessary expenses. These reduce your taxable income and help you keep more of what you earn.

⚠️ A business expense must be ordinary (common in your trade) and necessary (helpful and appropriate for your business). Personal expenses don’t qualify unless there’s a clear business portion.

💻 Technology & Office Expenses

• Computer or Laptop – If used for your business (even partly).

• Software & Subscriptions – QuickBooks, Canva, Zoom, Microsoft 365, etc.

• Office Supplies – Pens, paper, notebooks, printer ink, etc.

• Internet Bill – Business portion only (percentage of use).

• Cell Phone Bill – Deduct the % used for business calls.

🧾 Professional & Legal Services

• Accounting & Tax Prep Fees

• Legal Fees – Business contracts, advice, setup, disputes.

• Consulting Fees

• Bookkeeping Services

🏢 Home Office Deduction

• Home Office – If a space in your home is regularly and exclusively used for business.

  • Flat rate: $5/sq ft up to 300 sq ft

  • Actual expense method: deduct % of rent/mortgage, utilities, insurance, etc.
    
    

🚗 Vehicle & Travel Expenses

• Mileage – Track business miles (standard rate for 2024 is 67 cents/mile).

• Gas, Oil, Repairs, Insurance – If using actual expense method.

• Tolls & Parking – Only for business trips.

• Business Travel – Flights, hotels, rental cars, meals (see below).

🍔 Meals & Entertainment

• Client Meals – 50% deductible if business-related.

• Travel Meals – 50% deductible when traveling overnight for business.

• ❌ Entertainment (like sports tickets or concerts) is not deductible.

📢 Marketing & Advertising

• Website & Hosting Fees

• Business Cards & Flyers

• Social Media Ads – Facebook, Instagram, Google Ads, etc.

• Promotional Items – Branded pens, shirts, etc.
  
  

📦 Business Operations & Supplies

• Tools & Equipment – If under $2,500, can usually deduct immediately.

• Inventory Costs – For goods sold (record cost of goods sold properly).

• Postage & Shipping – Labels, stamps, mailers, courier fees.

• Merchant Fees – Stripe, PayPal, credit card processing, etc.

• Bank Fees – Business account maintenance or overdraft fees.
  
  

🧑‍🤝‍🧑 Contractors & Employees

• Independent Contractors – Pay reported on 1099-NEC.

• Wages & Salaries

• Payroll Taxes Paid by Employer

• Employee Benefits – Health insurance, retirement, etc.

💼 Business Insurance

• General Liability Insurance

• E&O (Errors and Omissions) Insurance

• Cybersecurity Insurance

• Business Vehicle Insurance
  
  

📚 Education & Development

• Courses & Workshops – If directly related to your business.

• Books & Publications

• Certifications & Licenses
  
  

🏦 Interest & Fees

• Business Loan Interest

• Credit Card Interest – Only if card is used for business expenses.

• Bank Loan Origination Fees
  
  

🎯 Other Common Deductions

• Start-Up Costs – Up to $5,000 deductible in your first year.

• Business Association Dues

• State & Local Business Licenses

• Annual LLC Fees

• Tax Prep Software

• Retirement Contributions – SEP IRA, Solo 401(k), etc.
  
  

🛑 Not Deductible

• Personal expenses

• Clothing (unless it's a uniform required for work and not suitable for everyday use)

• Fines and penalties

• Commuting costs to and from a regular workplace