We’ve all heard it: “Write off everything you legally can!” And listen, I’m not here to rain on your deduction parade. I’m all about maximizing your write-offs, but there’s a fine line between what counts as a legitimate business expense and what’s just… well, something you wish you could deduct. Especially when you’re running a creative business, things can get blurry fast.
So let’s cut through the noise and break down what actually qualifies—because the last thing you want is to get hit with a surprise bill from the IRS.
What Actually Counts as a Business Expense?
According to the IRS, a business expense needs to be both ordinary and necessary.
- Ordinary = A typical expense for your industry.
- Necessary = Helpful and appropriate for your business operations.
Seems simple enough, right? But this is where a lot of creative entrepreneurs trip up. Not everything that feels important to your business is considered “necessary” by the IRS.
Take this scenario: You’ve got a photoshoot coming up, so you treat yourself to a blowout, a manicure, and a whole new outfit. I get it—you want to show up looking your best. But… are these expenses deductible? Unfortunately, nope.
Here’s why:
- Personal benefit matters. If you’re going to enjoy that fresh manicure and haircut after the photoshoot, it’s not a business expense.
- It’s not ordinary. Most businesses don’t get to deduct grooming and wardrobe expenses—so if it wouldn’t fly for a larger company like Disney or Nike, it won’t fly for you either.
And trust me, I’ve seen people try it. I’ve even had clients who ended up in audits for stuff like this—and yep, they had to pay every penny back.
What About Meals and Coffee?
Another area where people often get confused is meals and coffee. If you’re a solo business owner picking up Starbucks to fuel your workday—not deductible.
But if you meet a client or collaborator at Starbucks? That’s deductible. It’s all about the business purpose.
- Solo meal or coffee? Personal expense.
- Business meeting over food or drinks? Deductible.
Here’s the deal: You’re allowed to spend your business money however you want. If a daily latte or regular nail appointments make you happy—go for it! Just know that not everything counts as a deduction.
Play Smart with Your Business Expenses
This post isn’t here to tell you to stop spending. I’m just saying, be strategic about what you charge to your business. You don’t want to mess with the IRS—because if you get audited, those personal splurges disguised as business expenses will come back to haunt you.
And that’s where I come in.
Let Me Handle Your Books So You Don’t Have To
Tracking your expenses and staying on top of what’s deductible can feel like a full-time job—but it doesn’t have to be. With my professional bookkeeping services, I’ll make sure your books are organized, your deductions are legit, and your financials are audit-proof.
You focus on doing what you love—I’ll handle the numbers.
- Identify real business expenses vs. personal splurges.
- Keep your books clean and ready for tax season.
- Make sure you’re compliant and protected if the IRS ever comes knocking.
Click here to book a free discovery call, and let’s chat about how I can help you keep your finances on track—without the stress.
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