Small business tax deductions (or write-offs) are expenses related to your business that can be deducted from your tax return. According to IRS rules, business expenses must be both ordinary and necessary to be deductible. Expenses that are considered “ordinary” are those that are “common and accepted” in a particular trade or business. A “necessary” expense is anything that is “helpful and appropriate” but not indispensable.
Tax deductions can be claimed in two ways: by taking the standard deduction or by itemizing. Standard deductions are quicker, but you may lose out on some savings opportunities. It takes time and requires well-kept records to itemize your deductions, but it’s the best way to maximize your small business tax savings.
Deductions may be claimed by sole proprietorships, C-corps, S-corps, partnerships, and LLCs (although there might be different rules for each type).
A list of expenses that are commonly tax deductible for small businesses can be found on the left under Business Tax Deductions. For more information, click on each link.
*It is important to remember that some of these deductions may not apply to your business. We recommend consulting with your CPA or tax advisor before claiming a deduction.
