Business Expenses Tax Deduction

As a small business owner, // you know that taxes can be a major expense. But did you know that you can deduct many of your business expenses from your taxes? This can help to reduce your taxable income and save you money.

In this article, we will discuss what business expenses are deductible, how to claim them, and some common mistakes to avoid.

What Are Deductible Business Expenses?

The IRS defines deductible business expenses as “ordinary and necessary” expenses that are incurred in the course of carrying on a trade or business. This means that the expense must be something that is common and accepted in your industry, and it must be something that is necessary for you to operate your business.

Some common examples of deductible business expenses include:

  • Rent or mortgage payments for your business premises
  • Utilities (such as electricity, water, and gas)
  • Office supplies
  • Equipment rental
  • Repairs and maintenance
  • Advertising
  • Marketing
  • Professional fees (such as accounting and legal fees)
  • Travel expenses (such as airfare, hotel, and meals)
  • Entertainment expenses (subject to certain limitations)
  • Employee wages and benefits
  • Health insurance premiums for self-employed individuals
  • Depreciation of business assets

How to Claim Deductible Business Expenses

To claim deductible business expenses, you will need to itemize your deductions on your tax return. This means that you will need to list all of your deductible expenses on Schedule A of Form 1040.

If you are not sure whether an expense is deductible, you can consult the IRS’s Publication 535, Business Expenses.

Common Mistakes to Avoid

Here are a few common mistakes to avoid when claiming deductible business expenses:

  • Not keeping good records. It is important to keep good records of all of your business expenses. This includes receipts, invoices, and cancelled checks.
  • Overstating your expenses. You should not overstate your expenses in order to reduce your taxable income. The IRS may audit your return if they suspect that you are doing this.
  • Claiming expenses that are not deductible. Not all expenses are deductible. For example, personal expenses, such as your car payment or mortgage interest, are not deductible.


Deductible business expenses can help to reduce your taxable income and save you money on taxes. By understanding what expenses are deductible and how to claim them, you can make sure that you are taking advantage of all of the deductions that you are entitled to.

If you have any questions about deductible business expenses, you should consult with a tax advisor.

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