List of Common Business Deductions

April 13, 2006

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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.) If you do business as a partnership, you'll file Form 1065. If you operate as a corporation, you'll file Form 1120-A, Form 1120, or Form 1120-S for S corporations.

Among the Business Tools are Form 1040, Schedule C and Schedule C-EZ. They are in Adobe Portable Document Format (.pdf), and you will need the free Acrobat Reader to view and print the file.