Bookkeeping, accounting, and tax services for businesses in Greater Phoenix and across the US.

Call or Text: (480) 601-6130

What expenses are 100% deductible?

Most ordinary and necessary business expenses are 100% deductible. The confusion usually comes from the exceptions, so it helps to know which categories have limits.

Meals are only 50% deductible. Entertainment is not deductible at all since the 2017 tax law changes. Vehicle expenses depend on your business use percentage. Home office deductions are based on the portion of your home used exclusively for business. These are the main categories where limits apply.

Everything else that’s ordinary and necessary for your business is typically fully deductible. This includes office supplies, equipment, and furniture. Rent and utilities for your business space. Business insurance premiums. Professional services like accounting, legal, and consulting fees. Marketing and advertising costs. Software subscriptions and tools you use for business. Employee wages, payroll taxes, and benefits. Payments to contractors and subcontractors. Bank fees and merchant processing fees. Business licenses and permits. Continuing education and training directly related to your current business.

Business travel expenses like airfare and lodging are 100% deductible. The meals during that travel are still limited to 50%, but transportation and accommodations qualify fully.

Equipment purchases can be fully deducted in the year you buy them using Section 179 or bonus depreciation, up to certain limits. This applies to computers, machinery, vehicles used for business, and other tangible property. Without these elections, equipment gets depreciated over several years instead. A Phoenix area enrolled agent can help you determine whether immediate expensing or depreciation makes more sense for your situation.

The key phrase in all of this is “ordinary and necessary.” The expense has to be common in your industry and helpful for running your business. A landscaper buying a truck is ordinary and necessary. That same landscaper buying ski equipment is not, unless there’s a clear business purpose documented.

Documentation matters as much as the expense itself. Keep receipts and records that show what you bought, when, and why it was for business. An expense that’s technically deductible but can’t be proven in an audit doesn’t help you. Good bookkeeping throughout the year means your deductions are categorized correctly and supported by records when you need them.

The Valley's Trusted Accounting Firm

The Next Step:
A 15-Minute Call

Tell us what you're dealing with. We'll listen, ask a few questions, and then give you a simple price to do the work for you.

More Questions

What is a good profit margin for a construction business?

Most construction businesses should target 20-35% gross profit margin and 5-10% net profit margin. The actual numbers depend on whether you're a general contractor, specialty trade, or remodeler, and whether you're tracking job costs accurately enough to know your real margins.

Read answer

What is catch up bookkeeping?

Catch up bookkeeping is the process of bringing your financial records current after falling behind. It involves entering transactions, reconciling accounts, and producing accurate financial statements for the months or years you missed.

Read answer

At what point should I hire a bookkeeper?

Most business owners wait until bookkeeping becomes a crisis before getting help. The real threshold is when DIY bookkeeping costs you more than professional help would, whether in time, mistakes, or decisions made with bad information.

Read answer

What is the most overlooked tax break?

Retirement plan contributions. Most self-employed people either don't have a plan set up or contribute far less than allowed. The tax savings can be substantial and the money stays with you.

Read answer

What are the disadvantages of in-house bookkeeping?

In-house bookkeeping costs more than expected once you factor in salary, benefits, and management time. You also face coverage gaps during vacations or turnover, limited expertise from a single person, and increased fraud risk without proper segregation of duties.

Read answer

Why do contractors struggle with cash flow?

Construction cash flow problems happen because you buy materials and pay crews before customers pay you. The timing gap between spending money and collecting it creates constant cash pressure.

Read answer

Konexus Accounting is an Arizona accounting firm specializing in small business financials. We offer bookkeeping, accounting, and tax services. Our team is led by Dan Weaver, EA. An IRS-credentialed professional with 20+ years of tax and representation experience.

Client Reviews

5-Star Rated Firm
  • IRS Enrolled Agent credential seal
  • Intuit Certified Bookkeeping Professional badge
  • QuickBooks ProAdvisor Level 1 certification badge
  • QuickBooks ProAdvisor Level 2 certification badge
  • BBB Accredited Business seal
  • Gilbert Chamber of Commerce logo
  • Chandler Chamber of Commerce logo
  • Greater Phoenix Chamber - A Proud Member badge
  • Queen Creek Chamber of Commerce Member seal

© 2026 Konexus Accounting LLC