Logo Header

News & Advice

What Can Be Written Off LLC?

As an LLC (Limited Liability Company) owner, you can typically deduct various business expenses on your tax return, subject to IRS rules and limitations.

Here are common types of expenses that can be written off by an LLC…

  1. Operating Expenses – Deductible operating expenses are those incurred in the ordinary course of business to generate revenue. These may include:
    • Rent or lease payments for office space, equipment, or vehicles.
    • Utilities, such as electricity, water, and internet service.
    • Office supplies, including stationery, software, and postage.
    • Professional fees for legal, accounting, consulting, or other professional services related to your business.
    • Business insurance premiums, including liability insurance, property insurance, and professional liability insurance.
  2. Employee Expenses – If your LLC has employees, you can deduct various expenses related to their compensation and benefits, such as:
    • Wages, salaries, bonuses, and commissions paid to employees.
    • Employer contributions to employee benefit plans, such as health insurance, retirement plans (e.g., 401(k)), and other fringe benefits.
    • Payroll taxes, including Social Security and Medicare taxes, federal and state unemployment taxes, and any applicable state payroll taxes.
  3. Business Travel and Meals – You can deduct expenses related to business travel, meals, and entertainment, including:
    • Transportation costs, such as airfare, mileage, rental cars, taxis, and public transportation.
    • Lodging expenses for business-related overnight stays.
    • Meals and entertainment expenses incurred while traveling for business purposes, subject to certain limitations.
    • Business meals with clients, customers, vendors, or employees, generally limited to 50% of the cost.
  4. Vehicle Expenses – If your LLC owns or leases vehicles used for business purposes, you can deduct related expenses, including:
    • Depreciation or lease payments for business vehicles.
    • Vehicle operating expenses, such as fuel, maintenance, repairs, insurance, registration fees, and property taxes.
    • Business-related parking and tolls.
    • Mileage deductions for business use of personal vehicles, based on either actual expenses or the standard mileage rate set by the IRS.
  5. Marketing and Advertising – You can deduct expenses related to promoting your business and attracting customers, such as:
    • Advertising costs, including online ads, print ads, radio spots, and TV commercials.
    • Website development and maintenance expenses.
    • Marketing materials, such as brochures, business cards, and promotional giveaways.
    • Costs associated with trade shows, conferences, sponsorships, and other promotional events.
  6. Home Office Expenses – If you use a portion of your home regularly and exclusively for business purposes, you may be able to deduct related expenses, such as:
    • Home office utilities, insurance, repairs, and maintenance.
    • Depreciation on the portion of your home used for business.
    • Rent or mortgage interest allocable to the home office space.
  7. Startup and Organizational Costs – You can deduct certain costs incurred to start or organize your LLC, such as:
    • Legal and accounting fees for setting up the LLC.
    • Expenses for market research, product development, and feasibility studies.
    • Costs associated with obtaining licenses, permits, and regulatory approvals.
    • Organizational costs, such as filing fees and expenses for holding organizational meetings.
  8. Other Business Expenses – Depending on your industry and specific business activities, you may be able to deduct additional expenses, such as:
    • Equipment purchases or leases, including computers, machinery, furniture, and other business assets.
    • Inventory costs for goods sold.
    • Repairs and maintenance expenses for business property.
    • Education and training expenses related to improving or maintaining your skills.

It’s essential to keep accurate records and documentation of your business expenses to support your deductions and ensure compliance with IRS rules and regulations. Consult with a tax professional or accountant familiar with small business taxation to maximize your deductions and minimize your tax liabilities effectively. They can help you navigate complex tax issues, identify eligible deductions, and ensure that you’re taking full advantage of tax-saving opportunities available to your LLC.