What a self-employed business can deduct

50 lines, grouped by what they are, starting with the ones that save the most and get claimed the least.

There is no official master list of deductible expenses, and there cannot be one. The statutory test is whether a cost is ordinary and necessary for the trade you are actually in, which means a drain camera is deductible for a plumber and not for a copywriter. So treat this as a checklist rather than a definition: if something you spend money on is genuinely for the business and is not on this page, that does not make it non-deductible.

Start here if you read nothing else

These 8 are the ones people miss, and each is worth more than most of the everyday expenses that get carefully receipted:

Retirement contributions through the business
Self-employed health insurance
The Augusta rule
Employing your children
Health savings account
Client gifts, capped at $25
Meals you provide to your own staff
Startup costs

The ones that save the most, and get missed the most

These are not obscure. They are simply not obvious, and each is worth more than most of the everyday expenses people carefully track.

Retirement contributions through the businessoften missed A solo 401(k) takes up to $24,500 as your own deferral plus an employer contribution on top, $72,000 combined under 50, $80,000 from 50, $83,250 between 60 and 63. A SEP-IRA is simpler and takes up to $72,000. This is usually the single largest deduction available to a profitable one-person business, and the money stays yours.
Self-employed health insuranceoften missed Medical, dental, vision and some long-term care premiums for you and your family, deducted in full rather than at a percentage. It cannot exceed your net profit, and you cannot take it for any month you were eligible for a subsidised plan through a spouse's employer.
The Augusta ruleoften missed Under IRC Section 280A(g) you can rent your own home to your own company for up to 14 days a year, take the rent as a business deduction, and not report the income personally at all. It needs a written agreement, a genuine business purpose with an agenda, and a defensible market rate. It is only open to an S corporation, C corporation or partnership, a sole proprietor cannot rent a house to themselves.
Employing your childrenoften missed Wages paid to your own child under 18 are exempt from Social Security and Medicare tax if you trade as a sole proprietor or a husband-and-wife partnership, and the child's own standard deduction covers up to $16,100 of it tax-free. The work has to be real and paid at a fair rate, with a job description, timesheets and a regular pay schedule.
Half of your self-employment tax Automatically deducted against your income tax. You do not have to claim it, but it is worth knowing it is there before you conclude the self-employment rate is as severe as it first appears.
Health savings accountoften missed If you have a qualifying high-deductible health plan, $4,400 on your own or $8,750 for a family goes in deductible, grows untaxed and comes out untaxed for medical costs, the only account in the code with all three. Add $1,000 from age 55.

Where you work

Whether you rent premises or work from a spare room, the space costs money and the cost is deductible.

Home office Two methods. Simplified is $5 a square foot up to 300 feet, $1,500 at most, and no depreciation recapture when you sell. Actual apportions rent or mortgage interest, utilities, insurance and repairs by floor area and usually gives more. Space must be used regularly and exclusively for business. Home office must be principal place of business.
Rent for an office, studio, yard or storage unit Deductible in full where the space is used for the business.
Utilities Electricity, water, gas, waste and security monitoring for business premises. At home, this is part of the home office calculation rather than a separate line.
Repairs and maintenance Routine repairs are deductible now. Improvements that add value or extend the life of the property have to be capitalized and depreciated instead.
Property insurance Cover on business premises, contents and equipment.

Getting around

Two methods, and you generally have to choose one and live with it for that vehicle.

Mileage, the standard rate Two rates this year: 72.5 cents a business mile to June 30, and 76 cents from July 1 when the IRS raised it mid-year. A full-year claim has to be split at that date rather than multiplied by one figure. Needs only a log. You cannot use the standard rate at all on a vehicle you have previously claimed accelerated depreciation, Section 179 or bonus depreciation on, choosing it is treated as electing out of MACRS for that vehicle.
Actual vehicle costs Fuel, insurance, repairs, registration and depreciation, multiplied by your business-use percentage. Depreciation is capped annually, $12,400 in year one, $19,800 in year two. And those caps are applied at the business-use percentage too.
Tolls and parking Deductible on top of the mileage rate, which does not include them. Parking fines are not deductible.
Vehicle lease payments Deductible at the business-use percentage, with an adjustment on more expensive vehicles.
Commuting Travel between home and your regular workplace is personal and not deductible, however far it is. Travel between two work locations is deductible. Two exceptions are worth knowing: travel to a temporary work location outside your metropolitan area, and, if your home genuinely is your principal place of business, travel from it to any other location for that business, regular or temporary, at any distance.

Equipment and technology

Anything long-lasting can usually be deducted in full the year you start using it, rather than spread over its life.

Section 179 and bonus depreciation Deduct the whole cost in the year the asset goes into service, up to $2,560,000 a year, with 100% bonus depreciation now permanent. It must be more than 50% business use, and you deduct at that percentage. Larger SUVs are capped separately at $32,000.
Computers, tablets, phones and networking gear At the business-use percentage where you also use them personally.
Furniture and fittings Desks, chairs, shelving, treatment tables, waiting-room furniture.
Tools and trade equipment Everything from a massage table to a tractor to a set of securement straps, on the same Section 179 rules.
Software and subscriptions Deductible in the year you pay. Software developed for the business can be expensed in the year of cost rather than amortized.

People you pay

Whether they are employees or contractors changes your paperwork more than your deduction.

Wages, salaries and bonuses Deductible in full.
Your share of payroll taxes The employer half of Social Security and Medicare, plus unemployment tax.
Employee benefits Health cover, retirement contributions, life and disability cover, education assistance.
Contractors and subcontractors Deductible in full. Pay any one of them $600 or more in a year and you have to issue a 1099-NEC, that is your obligation, not theirs.
Recruitment Job advertising, recruiter fees and background checks.
Workers’ compensation insurance Deductible, and mandatory in most states once you have employees.

Finding and keeping clients

Nearly all of it is deductible in full. The two exceptions catch people out.

Advertising and marketing Website, search advertising, print, signage, sponsorship.
Branding and content Logo design, photography, video production.
Website costs Hosting, domains, certificates, maintenance.
Conferences and trade shows Entry, stand costs and the travel to get there.
Client gifts, capped at $25often missed Only $25 per recipient per year is deductible, a figure that has not moved in decades. Engraving and postage sit outside the cap; the gift does not. Anything above $25 is simply a personal cost.
Client entertainment, no longer deductible Tickets, green fees and similar have not been deductible since 2018. A meal alongside the entertainment can still qualify if it is billed separately.

Travel and meals

The rules differ sharply between the two, and between ordinary travel and being away overnight.

Business travel Airfare, hotels, taxis and car hire at 100% when the trip is primarily for business. Mixed trips are apportioned, and the test is the purpose of the trip rather than how you spent each hour.
Meals while travelling or with clients 50% deductible. You have to be able to say who was there and what business was discussed, and the meal must not be lavish. The temporary 100% restaurant deduction ended after 2022 and has not returned.
Meals you provide to your own staffoften missed No longer deductible at all from 2026. These were 50% deductible from 2018 to 2025, and 100% before that. Food supplied for your convenience or through a staff canteen now gets nothing, though it remains tax-free to the employee receiving it.
Per diem instead of receipts A fixed daily amount can replace itemized meal receipts. Drivers subject to hours-of-service rules use a higher rate at a different percentage, see the truck driver page.

Running the business

The unglamorous lines. Individually small, collectively not.

Professional fees Accountants, solicitors, consultants and bookkeepers.
Business insurance General liability, professional indemnity or malpractice, cyber and data-breach cover.
Licenses, permits and regulatory fees Professional licensing, trade registration, local business licenses, industry-specific registrations.
Professional memberships Trade bodies, professional associations, chambers of commerce. Clubs organized for pleasure or recreation are not deductible.
Bank charges, merchant fees and interest on business borrowing Card processing fees are often one of the larger overlooked lines for anyone taking payments online.
Office supplies and postage Deductible in the year you buy them.
Continuing education Deductible where it maintains or improves skills for work you already do. Not deductible where it qualifies you for a new line of work.
Books, journals and research subscriptions Where they relate to the business rather than to your general interest.
Startup costsoften missed Up to $5,000 of pre-launch spending is deductible in your first year and the rest is spread over 180 months. Entity formation costs are treated separately on the same pattern. People often assume money spent before the business opened is lost.
Bad debts Only where you had already reported the income. If you invoice on a cash basis and were never paid, there is nothing to write off, you were never taxed on it.
Business taxes and licenses State and local business taxes and property tax on business assets. Federal income tax is not deductible.
Uniforms and protective clothing Only where it is unsuitable for everyday wear, boots, hard hats, hi-vis, scrubs. Ordinary clothing bought for work is never deductible, however strictly it is expected.
Charitable donations Not a business deduction on a sole trader return. They go on your personal itemized deductions instead, which is why many people get no benefit at all.

What is not deductible, however business-like it feels

Your own timeWork you do for the business unpaid is not a deduction. There is no rate at which your own hours become an expense.
CommutingHome to your regular workplace is personal travel however far it is and however early you leave.
Ordinary clothingIf it is suitable to wear outside work it is not deductible, even where a client insists on it.
Client entertainmentTickets and green fees stopped being deductible in 2018. A separately billed meal alongside can still qualify.
Fines and penaltiesParking tickets, traffic fines and late-filing penalties are never deductible, including ones incurred entirely at work.
Political contributions and lobbyingNot deductible as a business expense in any amount.
Money you never receivedAn unpaid invoice is only a bad debt if you had already reported it as income. On the cash basis you never did, so there is nothing to write off.

By profession

Everything above applies whatever you do. These pages add what is specific to one trade, the equipment, the certifications and the rules that apply only in that line of work:

What these words mean

Net profit: What your business earned after business expenses, before any tax. It is the figure the self-employment tax is charged on, not what you took out of the business.
Sole proprietor: Someone who works for themselves without forming a company. The default if you started working for yourself and never registered anything, you and the business are the same legal person for tax.
1099-NEC: The form a client sends you, and the tax office, when they have paid you $600 or more in a year for work. You owe the tax on that income whether or not the form ever arrives.
Section 179: A rule letting you deduct the whole cost of equipment in the year you start using it, instead of spreading it over the years you own it.
Depreciation: Spreading the cost of something long-lasting, a vehicle, a camera, a tractor, across the years you use it, rather than deducting it all at once.
Depreciation recapture: When you sell something you had been depreciating, the tax office takes back part of the benefit by taxing the gain up to the amount you already deducted.
MACRS: The standard federal timetable for depreciation, the schedule that decides how much of an asset’s cost you deduct in each year of its life.
Per diem: A fixed daily amount you can deduct or be paid for time away from home, instead of adding up individual receipts.
C corporation: A company taxed as a separate taxpayer in its own right, so profit is taxed once to the company and again to the owner when paid out. The thing an S corporation election is meant to avoid.
S corporation election: Asking the tax office to treat your company as a pass-through, so profit is taxed to you rather than to the company. The owner takes a salary and the rest as a distribution, which is what saves payroll tax.

General information about how these deductions work, not tax advice. Whether a particular expense is deductible for you depends on facts this page does not have, check with a tax professional before claiming anything listed here.