Can I Write This Off?

Can I write off recruiting costs?

TL;DR

Yes, recruiting costs are generally deductible as a business expense.

Detailed Answer

Recruiting costs can be deducted as ordinary and necessary business expenses under IRS guidelines. These costs include expenses related to advertising job openings, hiring recruitment agencies, and conducting interviews. However, they must be directly related to the operation of the business and not for personal purposes. For example, if a company hires a recruitment firm to find a new employee, the fees paid to the firm are deductible. However, costs incurred for recruiting personal household employees are not deductible.

Where to Put It on the Tax Form

For sole proprietors, report on Schedule C, Line 27a. For corporations, report on Form 1120, Line 26.

Real World Example

A small tech startup spends $5,000 on a recruitment agency to hire a new software developer. This expense is reported as a deduction on their business tax return, reducing their taxable income.

Audit Risk & Documentation Tips

To minimize audit risk, maintain detailed records of all recruiting expenses, including invoices from recruitment agencies, receipts for job advertisement costs, and documentation of the hiring process. Ensure that all expenses are clearly business-related and not personal.

IRS Reference

IRS Publication 535, Business Expenses

Relevant Industries

Small BusinessCorporationsStartupsHuman Resources

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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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