Technology Expenses

Software subscription expenses can be deducted if the software is used for business purposes. This includes tools like accounting software, design programs, or project management platforms. If the software is used partially for personal purposes, only the business-use portion is deductible. For example, a graphic designer subscribing to Adobe Creative Cloud for client projects can deduct the full cost if used solely for business. However, if used 70% for business and 30% for personal projects, only 70% of the subscription cost is deductible. It's crucial to maintain records that demonstrate the business use of the software.

The cost of a new iPhone can be deductible as a business expense if it is used for business purposes, such as managing a social media account for your business. To qualify, the phone must be used primarily for business, and you must be able to substantiate the business use. If the phone is used for both personal and business purposes, only the portion of the expense attributable to business use is deductible. For example, if you use the phone 70% for business and 30% for personal use, you can deduct 70% of the cost. It's important to keep detailed records of your business use, such as call logs or a usage diary. The IRS requires that business expenses be both 'ordinary and necessary' under IRC §162, meaning they are common and accepted in your trade or business and helpful and appropriate for your business.