Can I Write This Off?

Can I write off tax software?

TL;DR

Tax software can be deductible if it is used for business purposes.

Detailed Answer

The cost of tax software is deductible if it is used to prepare business-related tax returns. This includes self-employed individuals, freelancers, and small business owners who use the software to file their business taxes. However, if the software is used solely for preparing personal tax returns, it is not deductible. For example, a freelancer using tax software to file a Schedule C can deduct the cost as a business expense.

Where to Put It on the Tax Form

Schedule C (Form 1040), Part II, Line 18 (Office Expense)

Real World Example

A freelance graphic designer purchases tax software to file her business taxes, including her Schedule C. She can deduct the cost of the software as a business expense on her tax return.

Audit Risk & Documentation Tips

Keep the receipt or invoice for the tax software purchase. Maintain records showing the software was used for business purposes, such as copies of business tax returns prepared using the software. This documentation can help substantiate the deduction if questioned by the IRS.

IRS Reference

IRS Publication 535, Business Expenses

Relevant Industries

FreelancersSmall BusinessSelf-Employed

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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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