Determine what’s deductible
Under IRS rules, deductible business expenses for the self-employed must be “ordinary” and “necessary.” Basically, these are the costs that are commonly incurred by businesses similar to yours and readily justifiable as needed to run your operations.
The tax agency stipulates, “An expense does not have to be indispensable to be considered necessary.” But pushing this gray area too far can trigger an audit. Common examples of deductible business expenses for the self-employed include licenses, professional fees, equipment, supplies, legal expenses and business-related software, along with related auto expenses and educational expenses