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Controlling Your Taxes Federal Income Tax Obligations Business Deductions General Rules for Business Deductions List of Common Business Deductions
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List of Common Business Deductions
To help you decide whether a particular expense is likely to be deductible, we've provided a list of the most common business deductions.
List of common deductible expenses:
- advertising
- bad debts from sales or services (for those using accrual accounting)
- bank fees on business accounts
- car and truck expenses
- commissions and fees
- cost of goods sold
- depreciation
- dues for trade associations and other not-for-profit, business-related organizations
- employee benefits
- gifts to customers, suppliers, etc.
- insurance (casualty and liability)
- interest
- legal and professional services
- meals and entertainment
- office expenses
- pension and profit-sharing plans
- rent or lease expense
- repairs and maintenance
- services performed by independent contractors
- supplies and materials (not included in cost of goods sold)
- travel expenses
- utilities
- wages of employees
If you don't see an item you're interested in on this list, check our list of common nondeductible expenses as well.
The IRS form on which these deductions must be reported will depend on your form of business operation, that is, whether you're a sole proprietorship, partnership, LLC or corporation.
If you operate your business as a sole proprietorship, you will report business deductions on Schedule C of Form 1040. (You can use the simpler Schedule C-EZ if your business expenses are under $5,000, you do not have inventory or employees, you use the cash method of accounting, and certain other requirements are met.) A single-member LLC is treated like a sole proprietorship. If you do business as a partnership, you'll file Form 1065. A multi-member LLC typically is treated like a partnership. If you operate as a corporation, you'll file Form 1120-A, Form 1120, or Form 1120-S for S corporations.
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