The IRS has a deceptively simple test for business expense deductibility: the expense must be both ordinary (common and accepted in your industry) and necessary (helpful and appropriate for your business). It doesn't have to be indispensable — it just has to be legitimately connected to your business activity.

A freelance web developer buying software subscriptions? Ordinary and necessary. A life coach buying books on leadership and communication? Reasonable case. The same life coach expensing luxury spa treatments because "relaxation improves client relationships"? That's going to be a problem.

The burden of proof is on you. You need records — receipts, invoices, bank statements, and in some cases a written explanation of the business purpose.

Any money you spend to promote your business is generally deductible. This includes:

Website hosting and domain registration Social media advertising (Facebook Ads, Google Ads, LinkedIn) Email marketing software (ConvertKit, Mailchimp, etc.) Graphic design for marketing materials Business cards and promotional items If you pay a freelancer to run your ads or build your website, that's deductible too — just make sure you issue a 1099-NEC if you paid them $600 or more.

This is one of the biggest categories for modern solopreneurs. Project management tools, design software, CRM systems, accounting software, video conferencing apps, cloud storage — if you use it primarily for business, it's deductible. SaaS subscriptions are typically deducted in the year you pay for them as ordinary business expenses.

Payments to accountants, attorneys, bookkeepers, and consultants are deductible. This includes the cost of your CPA preparing your business taxes, an attorney reviewing a client contract, or a business coach helping you grow your revenue. One note: legal fees related to personal matters (like a divorce) are not deductible even if you discuss your business assets.

Continuing education that maintains or improves skills required in your current business is deductible. Online courses, industry conferences, professional books and publications, workshops — if they're relevant to what you currently do, they qualify.

What doesn't qualify: education to qualify for a new career. A nurse paying for coding bootcamp to become a software developer can't deduct that as a business expense of their nursing practice.

Computers, monitors, cameras, microphones, printers, and other equipment used for business can be deducted. Under Section 179, you can deduct the full cost of qualifying equipment in the year you buy it, rather than depreciating it over several years. For 2025, the Section 179 deduction limit is $1,220,000 — well beyond what most solopreneurs need.

The 100% bonus depreciation that was available in prior years has phased down; for 2025 it sits at 40% of the asset's cost in the year placed in service. Check with your CPA on how to maximize equipment deductions for your specific situation.

Travel primarily for business purposes is deductible, including airfare, hotels, rental cars, and 50% of meals while traveling. The trip must be primarily for business — "mostly vacation with a few business meetings" doesn't cut it.

Local mileage driven for business purposes (not commuting) is deductible at the IRS standard mileage rate, which is 70 cents per mile for 2025. Keep a mileage log — the IRS loves to scrutinize travel deductions.

Business meals are 50% deductible when you're discussing business with a client, prospect, or partner. The meal must have a clear business purpose, and you should document who was there and what was discussed.

The "lavish or extravagant" standard applies — a reasonable client dinner in your city is fine. Dropping $800 on a meal for two is going to need a compelling explanation.

Entertainment expenses (sporting events, concerts, nightclub outings) are not deductible, following the Tax Cuts and Jobs Act of 2017. The meals during those events may still qualify if separately documented.

If you use your phone and internet for both business and personal purposes, you can deduct the business-use percentage. Many solopreneurs use roughly 50–80% of their phone for business. Be reasonable and consistent in your estimate.

If you have a dedicated business phone line, 100% of that cost is deductible.

Monthly fees for your business bank account, business credit card annual fees, payment processing fees (Stripe, PayPal, Square), and wire transfer fees are all deductible business expenses. These small amounts add up more than most people expect over a full year.

If you're self-employed and pay for your own health insurance (and aren't eligible for employer- subsidized coverage through a spouse), you can deduct 100% of your premiums for yourself, your spouse, and your dependents. This deduction is taken on Schedule 1 of your Form 1040, not on Schedule C — meaning it reduces your AGI directly.

Contributions to a SEP-IRA, Solo 401(k), or SIMPLE IRA are deductible. The limits are generous — a SEP-IRA lets you contribute up to 25% of your net self-employment income (up to $70,000 in 2025). A Solo 401(k) offers even more flexibility. These accounts let you reduce your tax bill now while building wealth for the future. There's arguably no better deduction available to solopreneurs.

When something is used for both business and personal purposes — a laptop, a car, a phone — you can only deduct the business-use percentage. This is one area where documentation and consistency matter. If you claim 80% business use for your car, the IRS may ask how you arrived at that number. A mileage log that supports the claim is your best protection.

A few things that solopreneurs frequently try to deduct but shouldn't:

Commuting from home to a regular place of business Personal clothing (unless it's a required uniform that can't be adapted for everyday wear) Personal gym memberships (unless you're a personal trainer)

Fines and penalties Political contributions Personal portions of mixed-use expenses

The IRS recommends keeping business expense records for at least three years from the date you filed the return (or two years from when you paid the tax, whichever is later). For assets like equipment, keep records until the period of limitations expires for the year you disposed of the asset.

Practically speaking, digital records work. A receipt in your email, a scanned copy uploaded to a folder, a photo snapped with your phone — all of these count. Apps like Expensify, Dext, or even a well-organized Google Drive folder can make receipt management genuinely painless.

Good deductions require good records and a genuine connection to your business activity. There's no magic trick here — it's about being thorough, being honest, and knowing what the rules actually say. The solopreneurs who pay the least in taxes aren't the ones cutting corners. They're the ones who track everything, work with a good CPA, and take every legitimate deduction available to them.

Next step: Audit your last three months of business expenses. You might be surprised what you've been leaving on the table.

The biggest deductions deserve their own deep dives: the home office deduction, self-employed benefits like health insurance and retirement, and the record-keeping habits covered in our bookkeeping guide that make every deduction defensible.