Checkmark iconCan I Write This Off?

Can I write off project management software?

TL;DR

Yes, project management software can be deductible as a business expense if it is used for business purposes.

Detailed Answer

Project management software is generally considered a deductible business expense if it is used to manage business projects, track time, or collaborate with team members. This deduction is applicable if the software is used primarily for business purposes and is ordinary and necessary for the operation of the business. However, if the software is used for personal purposes, the expense is not deductible. For example, a freelance project manager using software to coordinate with clients and track project timelines can deduct the cost as a business expense.

Where to Put It on the Tax Form

Schedule C, Line 27a for sole proprietors or as a business expense on the relevant form for corporations and partnerships.

Real World Example

A small marketing agency subscribes to a project management tool to organize client campaigns and track team progress. The monthly subscription fee is recorded as a business expense on their tax return.

Audit Risk & Documentation Tips

To minimize audit risk, keep records of the software purchase or subscription, including invoices and payment receipts. Document how the software is used in the business, such as project logs or team collaboration records, to substantiate its business use.

IRS Reference

IRS Publication 535, Business Expenses

Relevant Industries

FreelancersSmall BusinessConsultantsIT Professionals

Popular Related Pages

Related Questions

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

Back to Search