What Can LLCs Write Off? Top 1,050 Deductions Across 6 Popular Industries + FAQs

Confused about what LLCs can write off? You’re not alone. According to a recent survey, over 90% of small businesses miss key deductions, losing thousands in potential tax savings each year. This means entrepreneurs often overpay taxes simply because they aren’t aware of all the write-offs available to them.

The rules around LLC tax deductions can seem complex, but they don’t have to be. In this guide, we break down what expenses your LLC can write off across seven industries, clarify key tax terms, and provide real-world examples and common pitfalls to help you maximize savings.

LLC Write-Offs Unlocked: What Can Your Business Deduct?

An LLC can write off (deduct) most expenses that are ordinary and necessary for running the business. In plain terms, if your company spends money on something related to the business, there’s a good chance it can reduce its taxable income by that amount. Here are some common categories of LLC write-offs:

• Office expenses & supplies: Computers, software, printers, paper, and other supplies used for business.
• Rent & utilities: Office rent or coworking space fees, and utility bills (electricity, internet) for business facilities or a home office.
• Travel costs: Flights, hotels, and transportation for business trips or meetings.
• Vehicle expenses: Gas, maintenance, and mileage for cars used in the business.
• Marketing & advertising: Website costs, online ads, business cards, and marketing materials.
• Insurance & licenses: Business insurance premiums, professional licenses, and permits.
• Employee pay & contractor fees: Salaries, benefits, and payments to freelancers or subcontractors.
• Professional services: Fees for accountants, lawyers, consultants, or tax preparers.

If an expense is directly related to your LLC’s operations, it’s likely deductible. However, some write-offs have special rules or limits. For example, meals are only partially deductible, and certain expenses (like fines or personal use items) cannot be written off at all. The table below highlights how common expense scenarios are treated for tax deductions:

As you can see, most routine business costs are fully deductible, while a few are limited or disallowed. By taking advantage of these write-offs, LLCs can substantially lower their taxable income. Next, we’ll clarify some key tax terms to help you understand why these deductions exist and how they work.

Key Tax Terms Explained: Tax Lingo Made Simple

Understanding write-offs is easier once you know a few important tax terms. Here are key concepts every LLC owner should know, explained in simple language:

• Ordinary and Necessary: This is the IRS standard for business expenses. An ordinary expense is common in your industry, and necessary means it’s helpful and appropriate for your business. If an expense meets both criteria (for example, a laptop for a graphic designer), it’s likely deductible.

• Tax Deduction (Write-Off): A cost that you subtract from your business income, reducing the amount of income that’s taxed. For instance, if your LLC earns $100,000 and has $30,000 in deductions, you only pay tax on $70,000. A write-off doesn’t give money back directly, but it lowers your taxable profit, which in turn cuts your tax bill.

• Capital Expense vs. Current Expense: A current expense is a cost for something used up within the year (like office supplies or rent) – deductible immediately. A capital expense is money spent on an asset that lasts longer than a year (like machinery, vehicles, or buildings). Capital expenses usually must be deducted over time through depreciation (spreading the cost over the asset’s life) unless a special rule lets you write off the full cost in one year.

• Depreciation: The method of deducting a big asset’s cost over several years. For example, if you buy a $10,000 piece of equipment, you might deduct $2,000 per year over 5 years instead of all $10,000 at once (unless you use an accelerated write-off rule like Section 179). Depreciation is essentially a series of small write-offs for a large purchase.

• Section 179 Expensing: A tax rule that lets small businesses deduct the full cost of certain assets (equipment, software, machinery, etc.) in the year of purchase instead of depreciating over years. LLCs can use Section 179 to immediately write off major purchases, up to a large limit (over $1 million in 2025). This is extremely helpful for industries that require expensive equipment or vehicles.

• Pass-Through Entity: Most LLCs are pass-through entities for tax purposes, meaning the business itself doesn’t pay income tax. Instead, profits “pass through” to the owners’ personal tax returns. All these deductions therefore reduce the owner’s taxable income on their personal return. (Note: Some LLCs elect to be taxed as S-corporations or C-corporations, but the scope of deductions for business expenses remains similar.)

By understanding these terms, you’ll better grasp why certain expenses are deductible and how to claim them. Next, let’s put this knowledge into practice with concrete examples of LLC write-offs in action.

By the Numbers: Evidence and Breakdown

LLC write-offs can significantly lower a business’s taxable income, and the numbers tell the story. Many small businesses spend 80–90% of their revenue on expenses, leaving only 10–20% as profit.

All those expenses (80–90% of revenue) are potential deductions. In other words, it’s normal for a healthy business to write off a large portion of what it earns in order to operate. For example, a retail store might have high costs (inventory, rent, wages) and only keep a small margin as profit — that high cost percentage becomes deductions that shield most of its income from tax.

On the other hand, a solo consultant with minimal expenses might have a lower percentage of write-offs, but they can still deduct anything they spend for the business (travel, supplies, etc.) to reduce their tax hit.

To illustrate the impact: suppose your LLC spends $5,000 on a necessary business expense (equipment, marketing, etc.). If you’re in the 22% tax bracket, that write-off could save you about $1,100 in taxes (because $5,000 * 22% = $1,100). Essentially, the government is subsidizing 22% of your business purchase via the tax deduction.

The more legitimate expenses you claim, the lower your taxable income and the less tax you pay. This is why it’s crucial not to miss out on deductions — every dollar not deducted is extra taxable income.

It’s also worth noting how tax laws encourage business investment through deductions. For instance, the IRS allows a startup cost deduction of up to $5,000 for new businesses in their first year, which means if you spent money to launch your LLC (equipment, initial marketing, legal fees to form the LLC), you can write off a chunk of those costs immediately.

Similarly, Section 179 (mentioned earlier) lets businesses take a huge immediate deduction for equipment purchases (the limit is over $1 million, far above what most small LLCs will need). These provisions show that the tax code provides opportunities for businesses to lower their taxable income as they invest in growth.

One more big tax break for LLC owners to know: the Qualified Business Income (QBI) deduction. This isn’t a write-off for specific expenses, but rather a special deduction introduced in recent tax law. If your LLC is profitable, you may be able to deduct an additional 20% of your business profit off your taxable income. For example, if your LLC has $100,000 in profit after all the above write-offs, you might get to deduct another $20,000 (20%) just because you’re a pass-through business.

That would mean you only pay tax on $80,000 of that profit. This QBI deduction is essentially a bonus write-off to reward business owners, on top of the normal expenses you deduct. (There are some restrictions and phase-outs for higher incomes and certain service industries, but many small LLCs qualify.)

All these numbers and rules boil down to a simple principle: knowing what you can deduct directly saves you money. Whether it’s everyday expenses or special deductions written into law, each write-off is a chance to keep more of your earnings in your business. Next, we’ll compare how write-offs can differ across various industries, since what you spend money on (and deduct) often depends on the type of business you run.

1) RETAIL (Brick-and-Mortar Stores)

Table: 175 Deductions for Retail LLCs, with Example Deduction Amounts

2) E-COMMERCE (Online Retail)

Table: 175 Deductions for E-Commerce LLCs, with Example Deduction Amounts

3) RESTAURANTS & FOOD SERVICE

Table: 175 Deductions for Restaurants & Food Service LLCs

4) CONSTRUCTION & CONTRACTING

5) REAL ESTATE (Property Management & Investing)

6) HEALTHCARE & WELLNESS SERVICES

Avoid These Common LLC Write-Off Mistakes

Even with a solid understanding of write-offs, LLC owners can slip up in ways that cost them money or raise red flags. Here are some frequent mistakes to avoid when deducting business expenses:

1. Mixing personal and business expenses – Avoid combining personal purchases with business spending. For example, do not try to write off a family vacation as a “business trip.” Keep a clear line: only claim expenses that are truly business-related. Using a separate business bank account or credit card helps maintain this separation.

2. Not keeping receipts and records – Failing to save receipts, invoices, and mileage logs is a common error. If you ever face an IRS audit, you’ll need proof of your deductions. Save digital or paper copies of receipts for at least several years. Document the business purpose of each significant expense (for instance, note on a meal receipt who you met and what was discussed). Good recordkeeping ensures you can substantiate every write-off.

3. Forgetting deduction limits and rules – Many mistakes happen when people deduct expenses incorrectly. Remember that meals are generally only 50% deductible (not 100%), entertainment is not deductible at all, and gifts to any one person are capped at $25 per year. Also, if you use something for both personal and business (like your car or cell phone), you should only deduct the business-use percentage. Ignoring these rules can lead to disallowed deductions if audited.

4. Capitalizing vs. expensing mix-ups – Some business owners try to deduct a big asset all at once when they should depreciate it (or vice versa). For example, if you renovate an office or buy an expensive machine, those costs often need to be spread out over years. Misclassifying a capital expense as a regular expense can be a mistake. Use Section 179 or bonus depreciation if you qualify and want the full deduction immediately, but follow the tax guidelines. When in doubt, consult a tax professional to handle large purchases correctly on your return.

5. Missing out on legitimate deductions – On the flip side, a common mistake is not claiming write-offs you’re entitled to. Some LLC owners skip the home office deduction fearing it’s an audit trigger (today, it’s a well-established deduction – don’t be afraid to use it if you qualify). Others forget less obvious expenses like business bank fees, software subscriptions, or the portion of self-employment tax that’s deductible. Every missed deduction is money left on the table. Review your expenses annually to ensure you haven’t overlooked anything – even small costs like postage or office snacks add up.

6. Procrastinating on bookkeeping – Waiting until the end of the year (or tax time) to sort out your finances can lead to errors. When you rush, you might forget expenses or miscategorize things. A better practice is to track expenses throughout the year with accounting software or a good spreadsheet. This way, you won’t accidentally omit a deduction or claim something twice. Staying organized year-round makes tax filing much smoother and more accurate.

By steering clear of these mistakes, you can maximize your LLC’s deductions while staying in the IRS’s good graces. The key is to be organized, honest, and informed. If you’re ever unsure about a deduction, it’s wise to get advice from a CPA or tax advisor. They can help you navigate tricky situations (like complex depreciation or travel mixed with personal time) so you get the savings you deserve without breaking any rules.

Now that we’ve covered the essentials of LLC write-offs, let’s address some frequently asked questions that business owners often have:

FAQ: LLC Tax Write-Offs

Q: Do I need to form an LLC to write off business expenses?
A: No. Any legitimate business can deduct expenses, even if it’s a sole proprietorship. An LLC provides legal protection and other benefits, but it doesn’t create new deductions beyond what a business is normally allowed.

Q: Can a new LLC write off its startup costs?
A: Yes. Startup expenses (like initial marketing, equipment, or legal fees to form the LLC) can be deducted up to $5,000 in the first year. Any remaining startup costs above that can be amortized (deducted in pieces) over future years.

Q: Can my LLC write off a vehicle or car payment?
A: Yes. If a vehicle is used for the business, your LLC can deduct vehicle expenses. You can use the standard mileage rate (about 70 cents per mile in 2025) or deduct actual costs (gas, maintenance, insurance) proportional to business use. Even if the car is financed (car payments), you can deduct the business-use portion of interest and depreciation on the vehicle.

Q: Are home office expenses deductible for an LLC owner?
A: Yes. If you use a part of your home exclusively and regularly for business, you can take a home office deduction. This lets you write off a percentage of home costs (rent or mortgage interest, utilities, repairs) equal to the portion of the home used for the business. There’s also a simplified option – you can deduct $5 per square foot of the office (up to 300 square feet) without doing complex calculations.

Q: Are business meals and entertainment deductible for my LLC?
A: Meals: Yes (50%). Entertainment: No. You can deduct 50% of qualifying business meal costs – for example, taking a client to lunch or buying dinner during a business trip. However, entertainment expenses (like sports tickets, concerts, golf outings with clients) are not deductible under current tax law. Always separate meal charges from any entertainment on your records.

Q: Should I keep receipts for all my LLC write-offs?
A: Yes. It’s important to keep receipts, invoices, and records for your expenses in case of an audit. For meals and travel, note the business purpose and attendees. While you don’t submit receipts with your tax return, maintaining proper documentation will support your deductions if the IRS ever asks for proof.

Q: Can my LLC deduct expenses if it didn’t make any money this year?
A: Yes. If your LLC has no revenue or operates at a loss, you can still deduct your business expenses. A net loss can offset other income on your tax return (if you have another job or investment income), potentially lowering your overall tax bill. If you can’t use the loss this year (for example, you have no other income), you may be able to carry the loss forward to future tax years to offset profits then. Be mindful of the hobby loss rule: if you never make a profit over multiple years, the IRS might question whether it’s a real business, but an occasional loss is perfectly acceptable for a startup or growing company.

Q: Can my LLC write off charitable donations?
A: No (not as a business expense). Charitable contributions are not deducted on an LLC’s business tax form. If your single-member LLC (or partnership) gives to charity, those donations can be claimed on the owners’ personal tax returns if they itemize deductions. In other words, you can get a tax deduction for donations, but it’s taken personally (Schedule A) rather than as a business write-off. One exception: if the donation is promotional (sponsoring an event and getting advertising in return), it might count as an advertising expense for the business.

Q: Will taking a lot of write-offs trigger an audit for my LLC?
A: No, not inherently. There’s no fixed number of deductions that automatically triggers an audit. The IRS looks for extreme or unusual cases – for instance, very high expenses compared to income, or deductions that seem unrelated to the business. As long as your write-offs are legitimate and you have documentation, you shouldn’t fear taking all the deductions you’re entitled to. Many small businesses have years with large deductions (especially in startup or expansion phases). Just be sure your expenses are ordinary, necessary, and well-documented. If something is out of the ordinary (like an unusually large travel expense), include notes or keep extra proof. In summary, claim your write-offs confidently — just keep records in case you ever need to explain them.