The IRS allows deductions for expenses that are ordinary (common in your industry) and necessary (helpful for your business). Both conditions must be met.

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Documentation Is Key

Always keep receipts showing who, what, when, where, and why for every expense. Without documentation, even valid deductions can be disallowed.

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Mixed Use = Prorate

If you use something for both business and personal (like your car or phone), you can only deduct the business portion based on actual usage.

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What's Never Deductible

Fines, penalties, personal expenses, and "lavish" spending are never deductible—even if related to business activities.

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2025 Update: OBBBA Changes

The "One Big Beautiful Bill Act" restored 100% bonus depreciation for 2025 and increased Section 179 limits to $2.5M. However, office snacks and employer convenience meals drop to 0% deductible starting January 2026.

Official References

Deductibility answers in this tool are based on official IRS guidance:

IRS Guide to Business Expense Resources
Successor guidance to Publication 535, Business Expenses
IRS Publication 334
Tax Guide for Small Business
IRS Publication 463
Travel, Gift, and Car Expenses
IRS Publication 587
Business Use of Your Home

Each expense page cites its specific IRS source. This tool provides general guidance only. Consult a qualified tax professional for advice specific to your situation.

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This tool is for educational purposes only and does not constitute tax advice. Always consult a qualified tax professional for your specific situation.