Checkmark iconCan I Write This Off?

Can I write off bookkeeping services?

TL;DR

Yes, you can generally deduct bookkeeping services as a business expense if they are ordinary and necessary for your business.

Detailed Answer

Bookkeeping services are considered a business expense and are generally deductible if they are ordinary and necessary for your business. This means that the services must be appropriate and helpful for your business, and they must be services that are common and accepted in your business field. For example, if you are a freelancer or small business owner and you hire a bookkeeper to manage your financial records, this expense would typically be deductible. However, if you are an individual taxpayer using bookkeeping services for personal financial management, these costs would not be deductible. Also, if the bookkeeping services are related to setting up the business or are capital expenses, they may need to be amortized over a period of time rather than deducted in the year they are incurred.

Where to Put It on the Tax Form

Schedule C, Line 17 (Legal and professional services)

Real World Example

For example, if you are a freelance photographer and you hire a bookkeeper to manage your business finances, you can deduct the cost of the bookkeeper's services. However, if the bookkeeper also manages your personal finances, you can only deduct the portion of the cost that is directly related to your business.

Calculation Required

A calculation is required for this deduction.

If only a portion of the bookkeeping services are used for business, you must calculate the percentage of the total cost that is attributable to your business. For example, if 60% of the bookkeeper's time is spent on your business, you can deduct 60% of the cost.

Audit Risk & Documentation Tips

To substantiate this deduction in case of an audit, keep detailed records of the bookkeeping services provided, including invoices and receipts. Also, document how you determined the portion of the cost that is attributable to your business.

IRS Reference

IRS Publication 535 (Business Expenses)

Relevant Industries

FreelancersSmall BusinessRetailRestaurantsConsultants

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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 3, 2025

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