Heather Christison Says: “Commonly Used Business Deductions”
When you work for yourself, one way to save money is reducing your tax burden by writing off expenses as deductions. The QuickBooks Resource Center defines deductible expenses as “those that are seen as ‘ordinary and necessary’ for conducting business. Remember, however, that you can only deduct the business use of the expense you’re deducting.”
Many expenses, from supplies to travel to advertising, qualify as deductible expenses.
However, knowing which expenses qualify isn’t always easy. Some industries can claim certain deductions while others may not. The “ordinary and necessary” distinction becomes even hazier in cases where you use the same asset, such as a car or computer, for both personal and business use.
Deducting expenses is complicated territory, but taking the time to learn the basics can help you understand the areas of your business that can save you money.
To get you started, Heather Christison has created a list of commonly used business deductions that both SMBs and self-employed individuals can use. Founder of My Offsite CFO and certified QuickBooks Online ProAdvisor, Heather has worked extensively across various industries with small businesses, entrepreneurs, solopreneurs and startups.
Heather offers a few caveats to keep in mind:
“Most of these items can be deducted with no limitations, but there are some regulations regarding limits on certain types of business deductions. Check with your bookkeeper, CPA or other finance professional to check for nuances.”
“A good bookkeeper can help you maximize the deductions you can take.”
“Some things (major purchases like computers, furniture, etc) may need to be depreciated over time, but most items can be deducted all at once.”
While these commonly used deductions are applicable to many professions, we recommend reaching out to your network or a tax professional to see if there are any industry-specific deductions you can claim. For the absolute authority on deducting business expenses, visit the IRS website.
Heather Christison’s List of Commonly Used Business Deductions
Accounting (Professional Fees)
Advertising / Marketing / Promotion
Automobile (gas, repairs & maintenance, interest, depreciation) OR mileage rate
Cleaning / Janitorial
Computer and Internet Expenses
Contributions / Donations
Dues & Subscriptions
Freight In / Freight Out
Insurance (business, liability, health, etc)
* Check your state for guidelines on the deductibility of health insurance for business owners paid for by the business – you may need to take this as a personal deduction.
Interest (on business debt – loans, credit cards etc)
Legal (Professional Fees)
Licenses and Permits
Merchant Processing Fees
Printing and Reproduction
Professional Development (Continuing Education, Seminars, Training)
Repairs and Maintenance
Retirement Plan (Employee Benefits)
Telephone (Business Landline and Cell Phone)
Travel (Airfare, Hotel, meals while travelling, Taxi/Transportation, Tips)
Utilities (Electric, Water, Gas)
Items that can potentially be deducted all at once:
Furniture and Fixtures
Machinery and Equipment
Software (depreciated over 3 years)
Head over to Heather’s website to download the pdf of this list so you have it on hand as you track expenses in QuickBooks throughout the year. Heather also hosts a number of workshops in the San Francisco Bay Area if you want to learn about deductions in person!
Now it’s your turn
What expenses do you typically write off as business deductions? Which are unique to your industry?