Can I Write This Off?

Can I write off a CRM platform?

TL;DR

Yes, a CRM platform can be deductible as a business expense if it is used for business purposes.

Detailed Answer

The cost of a CRM (Customer Relationship Management) platform is deductible as a business expense if it is ordinary and necessary for your business. This means the CRM must be used to manage customer relationships, track sales, and enhance business operations. However, if the CRM is used for personal purposes, the expense is not deductible. For example, a small business using a CRM to manage client interactions and sales pipelines can deduct the cost as a business expense.

Where to Put It on the Tax Form

Schedule C, Line 27a for sole proprietors; Form 1120, Line 26 for corporations; Form 1065, Line 20 for partnerships.

Real World Example

A freelance graphic designer subscribes to a CRM platform to manage client contacts and project timelines. The monthly subscription fee is deductible as a business expense on their Schedule C.

Audit Risk & Documentation Tips

To minimize audit risk, maintain records of CRM usage, such as invoices, subscription agreements, and evidence of business use. Keep detailed logs of how the CRM supports business operations and any related communications.

IRS Reference

IRS Publication 535, Business Expenses

Relevant Industries

Small BusinessFreelancersConsultantsSales Professionals

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Disclaimer: This is for informational purposes only and should not be construed as tax or legal advice. Always consult your tax advisor.

Page created on July 7, 2025

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