20 Tax Write Offs For LLCs: LLC Expenses Cheat Sheet

You started an LLC to protect your personal assets and simplify your taxes. Now you’re staring at a pile of receipts, wondering which expenses actually reduce your tax bill. Don’t be discouraged! This is the article for you.

Most LLC owners miss legitimate deductions because they don’t know what qualifies. In other words, you’re leaving money on the table every tax season. But here’s the good news: the IRS lets you deduct any expense that’s ordinary and necessary for running your business. That covers everything from your office rent to your marketing budget…but the rules get complicated fast. Some expenses are fully deductible, others require specific documentation, and a few that seem obvious don’t qualify at all.

This guide breaks down the major tax write-offs for LLCs, explains how to claim them properly, and shows you how to avoid the mistakes that might trigger audits.

What Are LLC Tax Write-Offs?

LLC tax write-offs are business expenses you subtract from your revenue to reduce your taxable income. When you spend money running your business, the IRS lets you deduct those costs before calculating what you owe in taxes.

How Do LLC Tax Write Offs work?

Here’s how it works:

If your LLC earns $100,000 and you have $30,000 in deductible expenses, you only pay taxes on $70,000. The write-offs don’t give you cash back, but they significantly lower your tax burden.

The IRS uses two criteria to determine if an expense qualifies as a write-off. They must be:

1. Ordinary (common and accepted in your industry)
2. Necessary (helpful and appropriate for your business)

For example: A graphic designer can deduct Adobe Creative Cloud because it’s ordinary and necessary for their work. They can’t deduct a gym membership unless they’re specifically in the fitness industry.

Write-offs work differently depending on your LLC’s tax structure. Single-member LLCs report expenses on Schedule C of their personal tax return. Multi-member LLCs file as partnerships and report on Form 1065. Your tax structure also affects which expenses you can deduct and how you claim them, so consult with a tax professional to maximize your savings and ensure compliance.

List of Tax-Deductible Write-Offs for LLC

As you incur expenses, make sure to save every receipt and other important details. Then, use this list of common tax write-offs for LLCs as a reference when you’re deciding what to deduct.

In the next section, we’ll cover each category in detail, explaining what qualifies, how much you can deduct, and what documentation you need to support your claims.

• Startup Costs
• Rent
• Utilities
• Phone and Internet
• Home Office
• Office Supplies
• Payroll
• Employee Benefits
• Self-Employment Tax Deduction
• Legal and Professional Fees
• Depreciation
• Business Insurance
• Licensing
• Education
• Marketing
• Travel
• Business Meals
• Business Vehicle Expenses
• Automobile Expenses
• Inventory

20 Tax Write-Offs for LLCs

These are some of the most common tax write-offs for LLCs. Make sure to consult with a tax expert if you have specific questions about which laws apply to your business.

1. Startup Costs

You can deduct up to $5,000 in startup costs during your first year of business (IRS). This includes expenses incurred before officially opening, like market research, business plan development, legal fees for forming your LLC, and initial advertising. If your startup costs exceed $5,000, you can amortize the remaining amount over 15 years.

Imagine you spend $20,000 to get started. You could deduct $5,000 in year one, then $1,000 annually for the next 15 years. Just make sure to maintain detailed records of every startup expense, including receipts and dates.

2. Rent

Commercial rent for your office, retail space, warehouse, or storage facility is fully deductible. This includes base rent plus additional charges for common area maintenance, property taxes, or utilities in your lease.

You can’t deduct “unreasonable rent,” which may refer to a rent payment above market value, or high rent paid to one of your relatives. To make this deduction, maintain copies of your lease agreement and payment records.

3. Utilities

The full cost of utilities for your business location qualifies as a deduction: electricity, gas, water, sewer, trash removal, and depreciation of equipment. If you work from home, you can only deduct the percentage corresponding to your home office space. A home office taking up 15% of your square footage means you deduct 15% of your utility bills.

4. Phone and Internet

Business phone lines and internet service used exclusively for work are fully deductible, including monthly fees, equipment rental, and business long-distance charges.

If you use a personal phone or home internet for business, you can only deduct the percentage used for work. Track all your business calls and internet usage for at least one month to establish a reasonable percentage for your records. Make sure you keep separate business accounts to simplify documentation and prepare for potential audits.

5. Home Office

The home office deduction lets you write off a portion of housing costs. You must use the space regularly and exclusively for business. A spare bedroom that doubles as a guest room doesn’t qualify. Calculate your deduction using the simplified method ($5 per square foot, up to 300 square feet) or the actual expense method (percentage of home used for business). The simplified method is easier but may result in smaller deductions, depending on the size of your home office.

6. Office Supplies

If you use them entirely for work, you can deduct the cost of pens, paper, printer ink, staplers, folders, and any other supplies consumed within the year. This category also covers small office equipment like calculators, desk lamps, and wastebaskets. Items lasting longer than one year may need to be depreciated over time instead of fully deducted.

7. Payroll

Employee wages, salaries, bonuses, and commissions are fully deductible. This includes payments to W-2 employees and amounts paid to contractors reported on Form 1099. You can also deduct the employer portion of payroll taxes. Reliable payroll software streamlines this process for teams of any size.

8. Employee Benefits

You can deduct health insurance premiums, retirement plan contributions, life insurance, and other benefits provided to employees. This includes employer contributions to 401(k) plans, health savings accounts, and flexible spending accounts. But the benefits must be available to all eligible employees, not just owners or key personnel. Benefit costs and participation records also need to be carefully documented.

Note: The health insurance premiums for the business owner and their immediate family are

not always deductible. To be sure, connect with a tax expert to see which rules apply to your specific situation.

9. Self-Employment Tax Deduction

Self-employed LLC owners pay both the employer and employee portions of Social Security and Medicare taxes. The IRS lets you deduct the employer-equivalent portion (50%) of your self-employment tax. This deduction reduces your adjusted gross income but not your net earnings from self-employment. Tax software typically calculates this automatically, but you should verify the amount on your Schedule SE tax form.

10. Legal and Professional Fees

Many attorney fees, accountant costs, tax preparation services, and business consultant fees are fully deductible. This includes costs for forming your LLC, drafting contracts, handling disputes, and preparing tax returns. Fees related to personal legal matters don’t qualify, even if you discuss them during the same meeting.

Note: To stay compliant,your business and personal billing records separate to avoid confusion in case of an audit.

11. Depreciation

Because certain assets have “useful lives,” a technical term used by the IRS, the depreciation of some assets may also be considered a tax write-off for you LLC.

For example, computers, machinery, vehicles, and furniture all have useful lives, meaning they will wear out over time. To account for the way these assets depreciate over time, you might not deduct the entire amount right away.

Instead, you would deduct a portion of the expense every year for a few years. A tax professional can help maximize these complex deductions.

12. Business Insurance

Premiums for general liability insurance, professional liability coverage, commercial property insurance, and business interruption insurance are deductible. Workers’ compensation insurance also qualifies. Personal insurance policies are not deductible, even if you occasionally use personal assets for business.

13. Licensing

State and local business licenses, professional certifications, and industry-specific permits are deductible. This typically includes annual renewal fees, sometimes along with the cost of continuing education. Make sure you track all licensing information, communications with licensing boards, and payment records.

14. Education

You can deduct the cost of education that maintains or improves skills required in your current business. This includes workshops, seminars, online courses, and professional development programs. However, you may not deduct education that qualifies you for a new trade or business.

For example, a marketing consultant can deduct a social media advertising course but not law school tuition. So keep track of any relevant course descriptions, payments, and proof of the program’s relevance to your current business.

15. Marketing

Advertising costs, website development and hosting, social media ads, print materials, and promotional items are deductible. This includes payments to marketing agencies, graphic designers, and copywriters.

Brand development and market research also qualify. But you’ll need to track all marketing expenses and tie them to specific campaigns your business launched during the year.

16. Travel

You can deduct the cost of airfare, hotels, rental cars, and 50% of meals during business trips. The primary purpose of your trip must be business-related, though you can add personal days without losing the deduction for business expenses.

Local travel (driving between client meetings or job sites) is also deductible.

You’ll need to keep records of each trip’s purpose, as well as dates, locations, activities you performed, and how they were related to your business.

17. Business Meals

You can deduct 50% of meal costs when dining with clients, potential customers, or business partners to discuss work. The meal must involve substantial business discussion. Think of it this way:

Grabbing lunch with a colleague to talk about a project counts, but buying coffee for yourself doesn’t.

And remember, keep all receipts, noting who attended and what you discussed during the meal.

18. Business Vehicle Expenses

When calculating your mileage deduction, choose between the standard mileage rate or the actual expense method. For 2026, the standard mileage rate for self-employed and business is 72.5 cents/mile (). The standard rate covers gas, maintenance, insurance, and depreciation.

The actual expense method lets you deduct the business-use percentage of all vehicle costs. Most small business owners find the standard rate simpler. Every business mile should be tracked with the date, destinations, and reason for the trip.

19. Automobile Expenses

If you use the actual expense method, you can deduct gas, oil changes, repairs, insurance, registration fees, and depreciation based on business-use percentage.

If you use your vehicle 60% for business, you’ll deduct 60% of all car expenses. However, you must track total miles driven and business miles separately. Commuting from home to your regular workplace doesn’t count as business mileage.

20. Inventory

After you sell products, you can deduct the original amount you paid to buy or produce them. This is called the “cost of goods sold” deduction, or COGS. You can’t claim the deduction for unsold inventory, as it’s considered an asset. Once the inventory is sold, you can deduct the cost of raw materials as well as finished goods. Use Schedule C to calculate and report this deduction.

How to Write Off LLC Business Expenses

Writing off business expenses can be complicated. Even after you know what to deduct, you’ll need a system to track the details. These steps can help you maximize your deductions and reduce your compliance risk.

1. Separate Business and Personal Finances

Open a dedicated business bank account and credit card for your LLC. This separation creates a clear financial trail and removes the need to sort through personal transactions at tax time. When everything runs through business accounts, you can easily track deductible expenses without digging through personal spending. This separation also strengthens your liability protection by maintaining the corporate veil between your personal assets and business operations.

2. Track Every Expense in Real Time

Don’t wait until tax season to organize your expenses. Record each transaction as it happens using accounting software, spreadsheets, or expense tracking apps. Categorize expenses immediately so you know exactly where your money goes.

Real-time tracking can prevents forgotten deductions and gives you an accurate picture of business profitability throughout the year.

3. Save All Receipts and Documentation

The IRS requires proof for every deduction you claim. Save receipts, invoices, bank statements, and credit card records for at least seven years. Digital copies work just as well as paper, so scan or photograph receipts immediately to save physical space.

For meals and entertainment, note the business purpose, attendees, and discussion topics on each receipt. Vehicle expenses need mileage logs with dates, destinations, and business purposes for every trip. The more details you record, the safer you’ll be in the event of an audit.

4. Know the Difference Between Deductible and Capital Expenses

Not every business purchase gets deducted immediately. Items used for more than one year (equipment, vehicles, furniture) are typically capitalized and depreciated over their useful life. Smaller items consumed within a year (office supplies, advertising costs) are deducted in full. The distinction affects your cash flow and tax planning, so categorize purchases correctly from the start.

5. Consult a Tax Professional

Tax laws change frequently, which can impact which deductions you qualify for. Work with a qualified accountant or tax advisor to ensure you’re claiming every legitimate deduction while avoiding mistakes that trigger audits. They can also help you choose between different deduction methods (like standard mileage versus actual vehicle expenses) to maximize your tax savings. The cost of professional tax help is itself a deductible business expense.

6. File Quarterly Estimated Taxes

LLC owners typically pay estimated taxes on a quarterly basis. You can estimate your tax liability each quarter using IRS Form 1040-ES. Underpaying quarterly estimates can result in expensive penalties, while overpaying ties up cash you could be using in your business. Review your estimates quarterly and make adjustments based on your actual revenue and expenses.

Additional Tips for Writing Off LLC Expenses

These tips will help you go beyond the basics of writing off LLC expenses. They’ll help you capture every legitimate deduction and collect the documentation you’d need for an audit.

Tip 1: Keep Business and Personal Expenses Completely Separate

Never use your business credit card for personal purchases, even if you plan to reimburse the company later. Mixed transactions lead to messy documentation and expose you to greater risks. If you accidentally charge a personal expense to your business account, categorize it as an owner draw and document the correction immediately.

Tip 2: Maximize Your Home Office Deduction

Many LLC owners underutilize this deduction because they don’t understand the requirements. Your home office doesn’t need to be a separate room, but it must be used exclusively for business. A desk in the corner of your bedroom qualifies if you never use that space for personal activities. Measure the square footage carefully and take pictures of your workspace to document the way you use it.

Tip 3: Track Mileage Automatically

Manual mileage logs are tedious and easy to forget. Alternatively, you can use a mileage tracking app that automatically records trips using your phone’s GPS. Apps like Timeero capture every business mile without requiring you to remember dates and destinations. The IRS accepts digital mileage logs as long as they include all required information.

Tip 4: Review Your Tax Structure Annually

Your optimal tax structure will naturally change as your business grows. A single-member LLC might work well as a pass-through business, while some companies with higher revenue may benefit from S-corp status. Work closely with a tax professional to determine if and when it’s time to restructure.

Tip 5: Document Everything

When the IRS questions a deduction, documentation becomes hugely important. Your recordkeeping process can make or break your case. If you’re not already using accounting software, you can still track expenses in a spreadsheet with dates, amounts, vendors, and reasons for each purchase. Attach digital copies of receipts to every entry. This level of detail turns a potential audit into a straightforward review of organized records.

Tip 6: Don’t Overlook Small Deductions

Bank fees, credit card processing charges, domain name renewals, and software subscriptions add up quickly. It’s all too easy to miss these small recurring expenses. Review your business credit card and bank statements every month and record each deductible expense.

How Paycor Helps You Manage Business Expenses

Managing LLC expenses and tax deductions gets more complex as your business grows. When you’re tracking payroll, benefits, business travel, and dozens of other expense categories, manual spreadsheets can’t keep up. You’ll eventually need integrated software that captures every deductible expense and maintains proper documentation, such as expense management software.

Paycor’s HR Software streamlines expense management, payroll processing, and recordkeeping in one centralized platform. Our integrated tools empower leaders to make the most of LLC tax write-offs, stay compliant, and drive long-term business results.

Manage Your LLC Expenses with Paycor

Paycor is an HCM solution that empowers leaders to manage expenses, process payroll, and maintain tax-compliant records without the administrative headaches. Our software helps you capture deductible expenses in real time, so nothing falls through the cracks during tax season.

Take a guided tour to see how Paycor streamlines LLC expense tracking and tax compliance.

FAQs About LLC Tax Write-Offs

Get the answers to LLC owners’ top questions about tax write-offs and expense tracking.