Commonly Used Business Expense Categories
Below is a list of some of the most commonly used business expense categories for small businesses. Some industries have other specific categories, but this is a general list you can use to set up your bookkeeping/accounting. The most important thing to keep in mind when you are setting up a system of any kind is that the system that works is the one you will use. If you want to call Professional Development something else like Continuing Education, do it! Use the terms that make the most sense to you in your business. For the most current information on deductions for taxes check with your CPA or visit the IRS website. If you would like a PDF of this list to print out click here.
- Accounting (Professional Fees)
- Advertising / Marketing / Promotion
- Automobile (Gas, Repairs & Maintenance, Interest, Depreciation) OR IRS mileage rate
- Bank Charges
- Cleaning / Janitorial
- Computer and Internet Expenses
- Contributions / Donations
- Dues & Subscriptions
- Equipment Rental
- Freight In / Freight Out
- Gifts – not to exceed $25/person and must keep a list of all people who received gifts
- Insurance (Business, Liability, Health, etc.)
- Check your state for guidelines on deductibility of health insurance for business owners paid for by the business. You may need to take this as a personal deduction
- Interest (on Business Debt – Loans, Credit Cards, etc.)
- Legal (Professional Fees)
- Licenses and Permits
- Merchant Processing Fees
- Office Expense
- Parking and Tolls
- Postage
- Printing and Reproduction
- Professional Development (Continuing Education, Seminars, Training)
- Rent
- Repairs and Maintenance
- Retirement Plan (Employee Benefits)
- Security
- Salaries
- Supplies
- Taxes – Payroll
- Taxes – Property (Real Estate, Inventory, etc.)
- Telephone (Business Landline, Cell Phone, Fax Line)
- Travel (Airfare, Hotel, Meals while traveling, Taxi/Transportation, Tips)
- Utilities (Electric, Water, Gas)
- Website Maintenance
These are potential capital expenditures (investments in your business) that may need to be deducted over time (depreciation):
- Furniture and Fixtures
- Machinery and Equipment
- Computer Equipment
- Business Vehicles
- Software (depreciated over 3 years)
Uncommon Business Expense Categories
- If you are a speaker the “Uniform” or “Costume” you wear on stage to speak may be a business deduction
- If you also got your hair & makeup done for your speaking engagement that may be a business deduction. This doesn’t mean you can take a deduction every time you get your hair done. If you get it done for a speaking engagement as part of your branding you may be able to deduct it
- Travel meals are 100% deductible as a travel expense
- If you travel with your family for a business trip, you may NOT deduct the cost of their airfare or travel. But, you may upgrade to a larger hotel room to accommodate them and take that as a business deduction.
- Meals brought in to the office for “convenience of the employer” are deductible at 50%
- Meals and entertainment are no longer deductible with the 2018 Tax bill. Certain events may qualify as Advertising/Marketing or Promotional expense
- If you meet clients in your home the cost of cleaning and lawn maintenance are potential business deductions
- Animal expenses – if your pet is your “security” you can deduct part of the cost of caring for your pet. If your pet is the “Mascot” for your business, you may also be able to deduct part of the cost of caring for them