{"id":503292,"date":"2022-09-22T12:26:00","date_gmt":"2022-09-22T19:26:00","guid":{"rendered":"https:\/\/jorgep.com\/blog\/?p=503292"},"modified":"2026-02-20T07:08:48","modified_gmt":"2026-02-20T14:08:48","slug":"deductible-business-expenses-categories-for-small-businesses","status":"publish","type":"post","link":"https:\/\/jorgep.com\/blog\/deductible-business-expenses-categories-for-small-businesses\/","title":{"rendered":"Deductible Business Expenses Categories for Small Businesses"},"content":{"rendered":"\n

One of the benefits of small businesses ( sole proprietor or LLC) is that certain expenses can be deducted before taxes. The IRS has defined business expenses as \u201cthe cost of carrying on a trade or business,\u201d going on to say that these expenses are usually deductible if the business operates to make a profit. –  Any expense that is considered ordinary and necessary for your business is likely a deductible expense.<\/p>\n\n\n\n

At minimum, the following are the basic categories used by small businesses to declare basic expenses to the IRS ( see more detail on IRS publication: 2023 Publication 334 (irs.gov)<\/a> and IRS Publication 535; Business Expenses<\/a> )<\/p>\n\n\n\n

Please note that depending on YOUR NEED, you can have many other categories and subcategories, but ultimately, a simplified roll-up will be needed for the IRS. <\/p>\n\n\n\n

<\/p>\n\n\n\n

Expense Category<\/th>Description<\/th><\/tr>
Advertising<\/td>This includes the cost of placing ads or running commercials for your business.<\/td><\/tr>
Continuing education<\/td>Thinking of going back to school to learn the latest in your field? That\u2019s deductible.<\/td><\/tr>
Cost of Goods Sold (COGS)<\/td>COGs (cost of goods sold), or items and storage paid to sell are all tax-deductible (  see Cost of goods sold\u2014chapter 6 of Pub. 334<\/a>.)<\/td><\/tr>
Credit and collection fees<\/td>If you need to use outside agencies to collect past due balances, you can deduct that.<\/td><\/tr>
Dues and subscriptions<\/td>Subscription costs to publications related to your business are deductible, as are membership dues for professional organizations.<\/td><\/tr>
Employee benefit programs<\/td>The cost of employee health insurance or retirement benefits such as a 401(k) match is fully deductible.<\/td><\/tr>
Insurance<\/td>General liability, worker\u2019s compensation, product liability, and disability insurance premiums are deductible.<\/td><\/tr>
Maintenance and repairs<\/td>Whether it\u2019s for routine maintenance like HVAC servicing, or replacing cracked tile in your reception area, maintenance and repairs are deductible.<\/td><\/tr>
Office expenses and supplies<\/td>This includes things such as pens and pencils, file folders, toner for your copier, and ink cartridges for your printer.<\/td><\/tr>
Postage and shipping<\/td>The cost of shipping orders or simply mailing a letter is a deductible expense.<\/td><\/tr>
Printing<\/td>Whether it\u2019s a one-page document, or a booklet for your customers, the cost of printing is deductible.<\/td><\/tr>
Rent<\/td>If you rent office or retail space, the rent is deductible.<\/td><\/tr>
Salaries and other compensation<\/td>Employee salaries as well as any wages paid to contract employees is completely deductible.<\/td><\/tr>
Telephone<\/td>Whether it\u2019s a state of the art phone system or cell phones for your field reps, the cost of your phones is completely deductible.<\/td><\/tr>
Travel<\/td>Any business related travel is deductible, whether it\u2019s local, national, or international, as long as it\u2019s considered necessary for your business.<\/td><\/tr>
Utilities<\/td>The cost of your gas, electricity, and water is a completely deductible expense.<\/td><\/tr><\/tbody><\/table><\/figure>\n\n\n\n

Additionally, for new businesses you can have Startup Expenses which are defined as the amounts that are paid for:<\/strong><\/p>\n\n\n\n

    \n
  1. Creating an active line of trade or business<\/li>\n\n\n\n
  2. Investigating the creation or acquisition of an active line of trade or business<\/li>\n<\/ol>\n\n\n\n

    A startup cost can be written off if it meets both the following conditions:<\/p>\n\n\n\n