When you’re just starting out, every dollar counts.
The IRS isn’t exactly going to tell you,
“Hey, by the way, you could have deducted that.”
So here’s the stuff founders forget all the time, the deductions you should absolutely take.
Those early expenses before you officially launched?
Incorporation fees
Legal consultations
Market research
That first website mockup
The IRS lets you deduct up to $5,000 of these in year one.
Use it, it’s free runway.
Your startup probably runs on:
Slack, Notion, Figma, AWS, Stripe fees, GitHub, OpenAI credits.
The good news? They’re all deductible.
Even that ChatGPT Pro subscription you use at 2 a.m.
Hired a dev, designer, or VA?
Paid them over $600?
You can deduct the cost
Just don’t forget to send them a 1099-NEC
Related: How to File 1099s for Startups
Building an MVP? Testing code?
Experimenting with algorithms?
You may qualify for the R&D Tax Credit, which can cut payroll taxes by thousands, even if you’re not profitable yet.
Full breakdown: R&D Tax Credit for Startups
Yes, your kitchen table might count.
You can deduct a portion of:
Rent or mortgage interest
Utilities
Internet
Office furniture
Just make sure it’s a dedicated workspace.
Investor coffee? Pitch trip to NYC?
The IRS lets you deduct:
Travel to business-related events
Hotels, transport, and 50% of business meals
Save the receipts (and maybe a note of who you met with).
That laptop you bought in panic?
The monitor you use for dev work?
Even that camera you’re using for marketing content?
They’re deductible, either all at once (Section 179) or spread out.
Every dollar you deduct:
Lowers your taxable income
Lowers your IRS bill
Extends your runway
And if you’re pre-revenue?
You’re still setting up the tax losses you’ll carry forward.
83(b) Elections (not a deduction, but a huge tax saver later)
Form 5472 for Foreign Founders (avoid $25K penalties)
Delaware Franchise Tax (pay it by March 1)
💼 Category | 🧮 Deductible? |
---|---|
Startup Costs | Yes, up to $5,000 in year 1 |
Software Tools | 100% |
Freelancers | Yes, file 1099-NEC |
R&D Expenses | Yes + credit |
Home Office | Yes, if dedicated space |
Travel & Meals | Yes, 50% of meals |
Equipment | Yes, Section 179 or depreciate |
Don’t leave money on the table because you didn’t know the rules.
The IRS has a playbook and you’re allowed to use it.
With AI-powered bookkeeping and tax filing, you stay focused on what matters: building your startup.
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