Ask ten small business owners what they can write off and you’ll get ten different answers — and at least half of them are wrong. Some leave real money on the table because they’re scared to claim anything that isn’t 100% obvious. Others claim everything with a business card swipe attached and hope nobody looks too closely. Neither approach is a system. Both cost you money, just in different directions.

Here’s the good news: the actual rule is simple, even if the examples get messy. Let’s fix that.

The rule: ordinary and necessary

The IRS standard for a deductible business expense is that it’s ordinary (common and accepted in your line of work) and necessary (helpful and appropriate for your business — it doesn’t have to be indispensable). That’s it. It doesn’t need to be something every business has. A photography studio’s lighting rig and a bookkeeper’s QuickBooks subscription are both ordinary and necessary — for their respective businesses.

Where people get tripped up isn’t the rule — it’s applying it to their own gray areas. Here are the ones that come up most often.

Categories that are commonly under-claimed

  • Home office — if you have a space used regularly and exclusively for business, you can deduct a portion of your rent/mortgage interest, utilities, and insurance based on square footage. “Exclusively” is the word that trips people up: the kitchen table doesn’t count if the family also eats dinner there.
  • Mileage — business driving (client meetings, supply runs, not your commute) adds up fast at the standard mileage rate. Most owners track this sporadically, or not at all, and quietly hand the IRS an interest-free loan every year.
  • Software and subscriptions — your invoicing tool, scheduling app, design software, even this website’s hosting. If it exists to run your business, it counts.
  • Professional services — bookkeeping, legal advice, a CFO session, tax prep. Paying for financial clarity is itself a deductible cost of doing business.
  • Education — courses, books, and guides that maintain or improve skills you use in your current business.

Where people over-claim (and invite trouble)

Meals are only 50% deductible, and only when there’s a genuine business purpose — not “I ate while thinking about my business.” Clothing has to be unusable outside of work (a uniform, not “nice clothes for meetings”). And the biggest one: mixing personal and business expenses on the same card, then trying to sort it out at tax time by memory. That’s not a deduction strategy, it’s a guess wearing a strategy’s clothes — and it’s exactly what turns a routine return into an audit flag.

A system beats a memory every time

The owners who get this right aren’t smarter about tax law — they just built a habit: separate business account or card, expenses categorized weekly (not in a scramble every April), and receipts saved as they happen instead of reconstructed from memory. Twenty minutes a week beats twenty hours in March, and it’s the difference between claiming what you’re actually owed and either underclaiming out of fear or overclaiming out of guesswork.

If you want the full breakdown — the complete list of what counts, a weekly tracking habit that actually sticks, and the exact records to keep in case anyone ever asks — that’s what Write It Off Right ($27) walks you through step by step.

And if deductions are just one piece of a bigger “I need my whole financial picture sorted” project, The Complete Money Talks Library ($99) bundles all twenty Money Talks guides — write-offs, pricing, debt payoff, emergency funds, and more — in one place. New here? Use code GROWFROMHERE15 for 15% off your first order, or STACKYOURGUIDES for 25% off when you buy three or more individual guides.

Grow from solid ground.