If you’re self-employed, you can deduct ordinary and necessary business expenses—costs you paid to run your business. Deductions lower your taxable income, which can reduce how much you owe in taxes.
You can only deduct the business portion of an expense, and you’ll want to keep records to support what you claim.
What counts as a deductible business expense?
A business expense is generally deductible if it’s:
Ordinary — common in your line of work
Necessary — helpful and appropriate for your business
It doesn’t have to be required — it just needs to be clearly work-related.
Common business expenses you can deduct
1. Supplies, equipment, and services
Office supplies
Tools or equipment used for your work
Software, apps, or subscriptions
Advertising and marketing
Professional services (like an accountant, lawyer, or consultant)
Business insurance
Bank fees and payment processing fees
Larger purchases like equipment or furniture (often deducted over time)
2. Vehicle and mileage expenses
If you use your car for business—like meeting clients or driving to job sites—you may be able to deduct those miles.
For 2025, the standard mileage rate is 70 cents per mile.
You’ll need to track:
Business miles driven
Dates and purpose of each trip
3. Phone and internet expenses
If you use your phone or internet for both work and personal use, you can deduct the business portion.
Internet: Fully deductible if it’s used only for business. If it’s mixed-use, deduct the business-use percentage.
Phone: A separate business phone is fully deductible. A personal phone can be partially deducted based on business use.
If you use your phone for work and personal use, you can deduct the business portion. Keep your bill or a simple note showing how you estimated it.
If you have a separate phone just for work, you can usually deduct the full cost.
4. Home office expenses
If you work from home, you may qualify for the home office deduction if:
You use part of your home regularly and exclusively for business, and
It’s your main place of business
Your deduction can’t exceed your net self-employment income.
There are two ways to calculate this:
Simplified method
Deduct $5 per square foot
Up to 300 square feet
Maximum deduction of $1,500
This option is simpler and requires less recordkeeping.
Regular method
Deduct a portion of actual expenses like rent, utilities, insurance, and repairs, based on how much of your home you use for work
5. Travel, meals, and education
You may also be able to deduct:
Travel and lodging for business
Business meals (generally 50% deductible)
Education or training related to your business
Personal travel or meals don’t qualify.
What expenses usually aren’t deductible?
You generally can’t deduct:
Personal expenses
Commuting between home and a regular work location
Fines or penalties
Expenses that aren’t related to your business
If an expense is partly personal and partly for work, only the business portion counts.
Why keeping records matters
Good records help support your deductions and make filing easier — especially if the IRS ever asks questions.
It’s best to keep records for at least 3 years (many people keep them for 7 years, just to be safe).
Keep things like:
Receipts and invoices
Bank and credit card statements
Mileage logs
Home office calculations
Phone and internet usage notes
Contracts and proof of payment
Helpful tips: Using a separate business bank account, saving receipts digitally, and writing down the business purpose of each expense can save time later.
Key takeaway
If you’re self-employed, deducting business expenses can significantly reduce your taxable income. You can only deduct expenses related to your work, and only the business portion counts.
Keeping clear records throughout the year helps you claim deductions confidently.
This content is provided for informational purposes only and should not be construed as tax, legal, financial, accounting, or other advice. Rules and regulations vary by location and are subject to change, so please consult with an expert if you need advice specific to you.
Any third-party links are provided for informational purposes only. The third parties and their sites are not endorsed by April and April is not responsible for, and has no control over, their content, privacy policies, or terms of service.