Can I Write This Off?Can I write off dedicated business software licenses?
TL;DR
Yes, dedicated business software licenses can generally be written off as a business expense.
Detailed Answer
Where to Put It on the Tax Form
Schedule C, Line 18 (Office Expenses) or Line 27a (Other Expenses) for sole proprietors; Schedule E for rental property owners; Form 1120, 1120S, or 1065 for corporations and partnerships.
Real World Example
A freelance graphic designer purchases an Adobe Creative Cloud license for $600 annually. Since the software is used exclusively for business, the designer can deduct the full $600 as a business expense.
Calculation Required
A calculation is required for this deduction.
If the software is used for both personal and business purposes, calculate the percentage of business use and apply it to the total cost to determine the deductible amount.
Audit Risk & Documentation Tips
Maintain receipts and invoices for software purchases. Keep a log or documentation showing the business use percentage if the software is used for both personal and business purposes. Be prepared to justify the necessity of the software for business operations.
IRS Reference
IRS Publication 535, Business Expenses; IRS Section 179
Relevant Industries
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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