Advertising
high confidenceAdvertising (Schedule C, Part II).
Ordinary costs to promote the business are generally fully deductible.
Typically deductible
- • Online ads (Google, Meta, marketplace promotions), sponsored posts
- • Website hosting, domain, and portfolio/listing pages used for the business
- • Business cards, flyers, signage, branded mailers
Watch out
- • Personal social-media or lifestyle spend with no clear business purpose is not advertising.
- • A permanent sign or large asset may need to be depreciated rather than expensed at once.
Bank fees
high confidenceUsually 'Other expenses' (Part V); sometimes Commissions/fees.
Fees on a business account or payment processing are generally deductible.
Typically deductible
- • Business bank monthly/maintenance fees, wire fees
- • Payment-processor fees (Stripe, PayPal, Square, marketplace fees)
- • Merchant-account and card-processing charges
Watch out
- • Fees on a personal account are not deductible — use a dedicated business account.
- • Interest is reported separately (Interest line), not as a bank fee.
- • Do not double-count processor fees already netted out of reported gross income.
Equipment
high confidenceDepreciation / §179 (Form 4562), or de minimis safe harbor for small items.
Business equipment is a capital asset: depreciate it, elect §179/bonus, or expense low-cost items under the de minimis safe harbor.
Typically deductible
- • Computers, cameras, tools, machines, furniture used in the business
- • Items under the de minimis safe harbor threshold ($2,500 per item/invoice without an applicable financial statement) can generally be expensed now
- • Larger assets recovered via §179, bonus depreciation, or regular depreciation
Watch out
- • Mixed-use equipment must be allocated to the business-use percentage.
- • Personal-use gear does not become deductible just because it is occasionally used for work.
- • Exact §179 and bonus-depreciation limits change yearly — verify the current Form 4562 instructions.
Insurance
high confidenceInsurance (other than health) (Schedule C, Part II).
Business insurance premiums are deductible; self-employed health insurance is handled separately, not on this line.
Typically deductible
- • General liability, professional liability / E&O, commercial property
- • Commercial auto (business portion), business interruption, workers' comp
Watch out
- • Self-employed health insurance is deducted above the line (Form 7206 / Schedule 1), NOT as a Schedule C insurance expense.
- • Personal homeowner's/auto policies are not deductible except an allocated business portion where allowed.
Meals
high confidenceDeductible meals (Schedule C, Part II) — generally 50%.
Qualifying business and travel meals are generally 50% deductible; entertainment is generally not deductible.
Typically deductible
- • Meals with a client/prospect where business is discussed (50%)
- • Meals while traveling away from your tax home overnight for business (50%)
Watch out
- • Entertainment (event tickets, golf, shows) is generally nondeductible after TCJA — a separately-stated meal can still be 50%.
- • A solo meal while working locally is generally personal, not a business meal.
- • Keep the business purpose and attendees with the receipt; keep it not lavish.
Office supplies
high confidenceOffice expense / Supplies (Schedule C, Part II).
Consumable supplies used in the business are generally deductible in the year used.
Typically deductible
- • Paper, ink, postage, shipping/packaging materials for customer orders
- • Small office consumables, cleaning supplies for a business space
- • Job materials that are consumed (larger inventory follows cost-of-goods-sold rules)
Watch out
- • Merchandise inventory and materials that go into products follow cost-of-goods-sold rules, not the supplies line.
- • Personal household supplies are not deductible.
Professional services
high confidenceLegal and professional services / Contract labor (Schedule C, Part II).
Fees for business services are deductible; payments to contractors may require issuing Form 1099-NEC.
Typically deductible
- • Accountant/bookkeeper, tax prep for the business, attorney fees for the business
- • Subcontractors, virtual assistants, editors, and other contract labor
- • Consultants and agencies engaged for the business
Watch out
- • Paying a contractor may require issuing Form 1099-NEC; the reporting threshold rose from $600 to $2,000 for payments made after Dec 31, 2025 — verify the current threshold. (A 1099 threshold does not decide whether the expense itself is deductible.)
- • Personal legal matters (e.g., divorce) are not business expenses.
- • Misclassifying employees as contractors carries payroll-tax risk.
Rent
high confidenceRent or lease (vehicles, machinery, other business property) (Schedule C, Part II).
Rent for business space or equipment is deductible; a home office follows separate home-office rules.
Typically deductible
- • Studio, shop, storage-unit, or coworking rent used for the business
- • Equipment or vehicle lease (business-use portion)
Watch out
- • A home office is claimed under the home-office rules (Form 8829 / simplified method), not as ordinary rent — do not double-count the same space.
- • Only the business-use portion of a leased mixed-use asset is deductible.
Software
high confidenceUsually Office expense / Other expenses (subscriptions); larger purchased software may be depreciated.
Business software and SaaS subscriptions are generally deductible as ordinary business costs.
Typically deductible
- • Accounting, design, productivity, CRM, and industry-specific SaaS used for the business
- • Cloud storage, hosting, and developer tools for the business
Watch out
- • Personal subscriptions (streaming, personal apps) are not deductible without a genuine business use.
- • Mixed personal/business tools should be allocated to the business-use share.
Travel
high confidenceTravel (Schedule C, Part II).
Ordinary and necessary costs of business travel away from your tax home overnight are deductible (meals on the trip are 50%).
Typically deductible
- • Airfare, lodging, rental car, and other transport for business trips away from home
- • Conference/registration fees; baggage and business communication costs while traveling
Watch out
- • A primarily personal trip with incidental business does not become deductible.
- • Meals during travel are 50%, not 100%; lavish costs are challenged.
- • Local commuting is not travel — see the Vehicle category.
Utilities
high confidenceUtilities (Schedule C, Part II); home-office utilities go through the home-office calculation.
Utilities for a business location are deductible; phone/internet are deductible at the business-use percentage.
Typically deductible
- • Electricity, water, gas, trash for a dedicated business location
- • Business-use portion of cell phone and internet
Watch out
- • Claiming 100% of a phone or home internet used for both personal and business is not defensible — allocate by business-use %.
- • Home utilities for a home office are handled inside the home-office deduction (Form 8829 or simplified method), not separately at 100%.
Vehicle
high confidenceCar and truck expenses (Schedule C, Part II) — standard mileage OR actual expenses.
Business driving is deductible using either the standard mileage rate or actual expenses (business-use %); you cannot use both for the same vehicle, and commuting is never deductible.
Typically deductible
- • Miles driven for business, tracked in a contemporaneous mileage log (date, miles, purpose)
- • Standard mileage rate (set annually and can be revised midyear — e.g. 70¢/mile for 2025; verify the current-year rate before filing) OR actual costs (gas, repairs, insurance, depreciation) times business-use %
- • Business parking and tolls are deductible in addition to either method
Watch out
- • Commuting between home and a regular workplace is never deductible.
- • You cannot deduct gas/repairs AND take the standard mileage rate for the same vehicle — the standard rate already includes operating costs.
- • Choose the method carefully in the vehicle's first business year; the choice constrains later years.
- • Realtors and others: home to a regular office is commuting, not business miles.
Other
medium confidenceOther expenses (Schedule C, Part V) — itemize by description.
A catch-all for ordinary and necessary business costs that don't fit another category; describe each so it can be reviewed.
Typically deductible
- • Business licenses and permits, dues to professional organizations
- • Continuing education that maintains or improves skills in your current business
- • Safety gear / required uniforms not suitable for everyday wear
Watch out
- • Clothing suitable for everyday wear is not deductible even if you only wear it for work.
- • Education that qualifies you for a new trade or business is generally not deductible.
- • Federal income tax and personal expenses are never business deductions.
- • 'Other' should be described, not used to hide questionable personal spend.