Small Business Tax
Deductible vs. Non-Deductible: What You Can and Can't Write Off
Not every business expense is a write-off, and claiming ones that aren't invites trouble. Here's where the line actually falls.
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01What makes an expense deductible?
To be deductible, an expense generally must be ordinary and necessary for your business. That's the standard the IRS applies, and most legitimate costs meet it.
02Clearly Deductible
Supplies, rent, utilities, professional fees, business insurance, advertising, and employee wages are all standard deductions when they're genuinely for the business.
03Clearly Not Deductible
Personal expenses, most commuting, political contributions, and fines or penalties generally can't be written off, no matter how you frame them.
04The Gray Areas
Meals, travel that mixes business and personal, and use of your car or phone for both need careful splitting. Deduct only the business portion, and document it.
05When in Doubt
If you're unsure whether something qualifies, ask before you claim it. A quick check is cheaper than defending a bad deduction later.
Common questions
What is the test for a deductible business expense?
The expense must be ordinary and necessary for your business. That is the standard the IRS applies, and most legitimate business costs meet it.
What can never be written off?
Personal expenses, most commuting, political contributions and fines or penalties. No framing changes that.
How do I handle an expense that is part business and part personal?
Split it. Deduct only the business portion of the meal, the trip, the car or the phone, and keep the record that shows how the split was made.
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Schedule a ConsultationThis article is general information, not individualized tax, legal, or financial advice. Every situation is different. Reach out and we'll look at yours directly.