Sole proprietors and many single-member LLCs report profit or loss on Schedule C (Form 1040). An expense is deductible if it is ordinary (common in your trade) and necessary (helpful and appropriate). It does not have to be required (Pub 463 intro; same test on Schedule C).
Typical lines your accountant will ask about (not a complete list): advertising, commissions and fees, contract labor, insurance (other than health), legal and professional, office expense, rent, repairs, supplies, travel, utilities, and “other” for things like software. See the current Schedule C instructions for the year you file: https://www.irs.gov/instructions/i1040sc
What needs a receipt
Almost every deduction needs a supporting document. Keep the receipt or invoice plus proof of payment. Note the business purpose if it is not obvious (client name, job, why). Travel, meals, and car have extra rules — next post.
What usually is not a business receipt
Personal groceries, commuting to a regular office, clothing you could wear anywhere, and entertainment (concerts, games, clubs) — entertainment is generally not deductible (Pub 463 ch. 2).
Not legal advice. Deductibility depends on your facts and the year. Talk to your accountant before you claim a line.
FAQ
- 1099-NEC income? You still keep expense records. The form does not replace receipts.
- Mixed personal/business? Split it. Only the business part is a candidate.
Not legal advice. Talk to your accountant.