Can I Write This Off?

Can I write off background checks for employees?

TL;DR

Yes, background checks for employees can be deductible as a business expense.

Detailed Answer

Background checks are considered ordinary and necessary business expenses if they are directly related to hiring employees. These expenses are deductible as they help ensure the suitability of candidates for employment, which is a common business practice. However, they must be directly related to the hiring process and not for personal reasons.

Where to Put It on the Tax Form

Schedule C (Form 1040), Line 17 for 'Legal and professional services' or as part of 'Other expenses' if more appropriate.

Real World Example

A small business owner runs background checks on potential employees to ensure they have no criminal history that could affect their job performance. The costs incurred for these checks are recorded as a business expense on their tax return.

Audit Risk & Documentation Tips

Keep detailed records of the background check expenses, including invoices and receipts, and ensure they are clearly related to the hiring process. Maintain documentation of the hiring process and the necessity of the checks to support the deduction in case of an audit.

IRS Reference

IRS Publication 535, Business Expenses

Relevant Industries

Small BusinessHuman ResourcesRecruitment AgenciesCorporate Employers

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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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