Because a DBA is a registered trade name rather than a separate legal entity, the IRS taxes most DBA owners as sole proprietors, which means DBA tax write-offs are simply the business deductions a sole proprietor claims on Schedule C. Every dollar you deduct lowers both your income tax and your 15.3% self-employment tax, so the write-offs are worth more than they look. The deductible categories run from everyday supplies and mileage to retirement contributions, health insurance premiums, and a 20% deduction on qualified business income.
The Ordinary and Necessary Test
Every deduction has to clear the same two-word bar. The expense must be ordinary, meaning common and accepted in your line of work, and necessary, meaning helpful and appropriate for running the business.1Office of the Law Revision Counsel. 26 USC 162 – Trade or Business Expenses It does not have to be indispensable, but it does need a real connection to earning income. Printer ink for your home office qualifies. A kayak you bought to clear your head does not.
You carry the burden of proof. Keep receipts, bank statements, and logs tying each expense to the business, and hold them for at least three years from the date you file.2Internal Revenue Service. Topic No. 305, Recordkeeping Without documentation, a legitimate expense can be thrown out in an audit.
Everyday Operating Expenses
Most of what you spend to keep the business running is deductible in full in the year you pay it.
Supplies, Software, and Education
Paper, postage, cleaning products for your workspace, business software subscriptions, cloud storage, and professional databases are all deductible. So are workshops, seminars, and classes that maintain or improve skills your business already uses. Education that qualifies you for an entirely new career does not count; the training has to sharpen what you already do.3Internal Revenue Service. Topic No. 513, Work-Related Education Expenses
Advertising and Marketing
Reasonable spending to promote your goods or services qualifies. That covers website hosting, domain registration, social media ads, printed business cards, and online campaigns. Paying a freelance designer to build marketing materials is deductible whether you code it as advertising or as a contractor payment.
Travel and Meals
When you travel away from your tax home overnight for business, airfare, hotels, and local transportation like rental cars and rideshares are deductible. Travel between two business locations on the same day also qualifies. Your regular commute from home to a primary workplace does not.4Internal Revenue Service. Topic No. 511, Business Travel Expenses
Business meals are deductible at 50% of the cost. The meal cannot be lavish, and you or an employee must be present. A working lunch with a client counts, and so does a solo dinner on a business trip.5Office of the Law Revision Counsel. 26 USC 274 – Disallowance of Certain Entertainment, Etc., Expenses
Insurance and Professional Fees
Premiums for policies covering business risks are fully deductible. That includes general liability, professional malpractice, and business property insurance. If you have employees, workers’ compensation premiums qualify too.
Accountant fees for business tax preparation and attorney fees for business legal advice are deductible on Schedule C, Line 17. Only the portion of a tax preparer’s fee tied to your business return qualifies, not the cost of preparing your personal return.6Internal Revenue Service. 2025 Instructions for Schedule C (Form 1040) – Profit or Loss From Business
Rent, Utilities, and Communications
Rent for a dedicated commercial space is a clean deduction, along with utilities at that location and phone or internet service used exclusively for business. For a personal phone line that handles both business and personal calls, only the business portion is deductible, so keep records of how you split it.
Wages and Contractor Payments
Wages, salaries, and the employer share of payroll taxes you pay employees are fully deductible. For independent contractors, payments remain deductible regardless of amount, but starting in 2026 you only file Form 1099-NEC for a contractor you pay $2,000 or more during the year. That threshold rose from $600 under prior law.7Internal Revenue Service. Form 1099 NEC and Independent Contractors
First-Year Startup Costs
Money you spent investigating or launching the DBA before it opened follows its own rules. You can deduct up to $5,000 of qualifying startup costs in your first year. That $5,000 allowance phases out dollar-for-dollar once total startup costs exceed $50,000 and disappears at $55,000. Anything left over gets amortized over 15 years (180 months).8Congressional Research Service. Selected Issues in Tax Reform: The Small Business Start-Up Deduction
Qualifying costs include market research, scouting locations, pre-opening advertising, and training employees before you open. The DBA registration fee itself, usually $10 to $150 depending on your state or county, fits here as well.
Equipment, Vehicles, and Depreciation
Equipment, furniture, vehicles, and other assets with a useful life beyond a single year are generally capitalized and written off over several years through depreciation. The IRS assigns each type of asset to a recovery class under MACRS; office furniture is seven-year property, while vehicles and computers are five-year.9Internal Revenue Service. Publication 946 (2025), How To Depreciate Property Two provisions let you take a bigger write-off upfront.
Section 179 Expensing
Section 179 lets you deduct the full purchase price of qualifying equipment, furniture, and certain other tangible business property in the year you place it in service. For 2026, the maximum deduction is $2,560,000, phasing out dollar-for-dollar once qualifying purchases exceed $4,090,000.10Office of the Law Revision Counsel. 26 USC 179 – Election to Expense Certain Depreciable Business Assets One catch: Section 179 cannot push your business into a net loss. If your taxable income before the deduction is $40,000 and you bought $60,000 of qualifying equipment, you deduct $40,000 this year and carry the remaining $20,000 forward.
Bonus Depreciation
Bonus depreciation works alongside Section 179 and covers qualified property above the Section 179 amount. Under legislation signed in 2025, qualified property acquired after January 19, 2025 is eligible for a permanent 100% first-year depreciation deduction.11Internal Revenue Service. Treasury, IRS Issue Guidance on the Additional First Year Depreciation Deduction Amended as Part of the One Big Beautiful Bill Unlike Section 179, bonus depreciation can create or deepen a net business loss, which may offset other income on your personal return.
Both elections are reported on Form 4562, which you attach to Schedule C.12Internal Revenue Service. About Form 4562, Depreciation and Amortization
Vehicle Deductions
If you use a vehicle for business, you pick one of two methods in the first year and generally stick with it for the life of that vehicle. The standard mileage rate for 2026 is 72.5 cents per business mile, plus parking fees and tolls on top.13Internal Revenue Service. IRS Sets 2026 Business Standard Mileage Rate at 72.5 Cents Per Mile, Up 2.5 Cents The alternative is the actual expense method: track gas, repairs, insurance, and registration, then deduct the business-use percentage.
Either method requires a contemporaneous mileage log recording the date, destination, purpose, and miles for every trip. This is one of the most audited deductions, and the IRS will throw out vehicle write-offs entirely if the log is missing or inconsistent.
The Home Office Deduction
DBA owners who work from home can deduct the business portion of home expenses if the space passes two tests at once. It must be used regularly and exclusively for business, so a kitchen table you also eat dinner at won’t qualify. It must also be your principal place of business, or a place where you regularly meet clients.
Simplified Method
The simplified method is a flat $5 per square foot of dedicated business space, capped at 300 square feet, for a maximum deduction of $1,500. The trade-off is no tracking of household expenses.14Internal Revenue Service. Simplified Option for Home Office Deduction
Regular Method
The regular method is a percentage. If your office is 200 square feet in a 2,000-square-foot home, you deduct 10% of qualifying expenses: rent or mortgage interest, property taxes, utilities, insurance, and maintenance. You can also depreciate the business-use portion of the home.
Depreciating your home has a downstream cost. When you sell, any depreciation you claimed is recaptured and taxed at a maximum rate of 25%, even if the rest of the gain qualifies for a lower capital gains rate. Worth knowing before you choose this method.
Self-Employed Health Insurance
If you pay for your own health coverage, you can deduct premiums for yourself, your spouse, and your dependents as an adjustment to income on Schedule 1. The policy can be in your name or the business name. The deduction is reported on Form 7206 and can include medical, dental, vision, and qualifying long-term care policies.15Internal Revenue Service. Instructions for Form 7206
Two limits catch people. The deduction cannot exceed your net self-employment income for the year. And you cannot claim it for any month you were eligible to participate in an employer-subsidized health plan, including a spouse’s plan, whether or not you actually enrolled. Because this sits as an adjustment to income rather than a Schedule C expense, it lowers income tax but not self-employment tax.
Retirement Plan Contributions
Funding a retirement plan is one of the strongest tax-reduction moves available to a self-employed DBA owner. Two plans dominate.
A SEP IRA lets you contribute up to 25% of net self-employment earnings, capped at $72,000 for 2026. Contributions are entirely employer contributions, so no employee deferrals or catch-ups.16Internal Revenue Service. Retirement Topics – 401(k) and Profit-Sharing Plan Contribution Limits
A Solo 401(k) is more flexible. You can defer up to $24,500 as an employee contribution, plus add employer profit-sharing of up to 25% of net self-employment income, with a combined cap of $72,000 for those under 50. Age 50 or older adds an $8,000 catch-up for a $80,000 ceiling. Ages 60 through 63 get an enhanced catch-up of $11,250, bringing their limit to $83,250.16Internal Revenue Service. Retirement Topics – 401(k) and Profit-Sharing Plan Contribution Limits
Retirement contributions are deducted on your personal return as an adjustment to income, not on Schedule C, so they lower income tax but not self-employment tax.
The 20% Qualified Business Income Deduction
Sole proprietors, including DBA owners, may qualify for the Section 199A deduction of up to 20% of qualified business income. On $80,000 of net profit, that is up to $16,000 off taxable income before rates apply. You take it on your personal return and do not need to itemize.17Internal Revenue Service. Instructions for Form 8995
If your total taxable income before the QBI deduction stays below roughly $201,750 (single) or $403,500 (married filing jointly) for 2026, the math is straightforward: 20% of qualified business income, reported on Form 8995. Above those thresholds, the deduction begins to phase out and the calculation gets more complex, especially for service businesses like consulting, law, accounting, and healthcare. Once taxable income reaches about $276,750 (single) or $553,500 (joint), the deduction for those service businesses disappears entirely.
Where It All Goes on Your Return
All business income and deductions land on Schedule C, Profit or Loss from Business, filed with your Form 1040. Gross receipts go in Part I; operating expenses are itemized across the designated lines in Part II. Depreciation and Section 179 amounts calculated on Form 4562 feed into Schedule C.18Internal Revenue Service. About Schedule C (Form 1040), Profit or Loss from Business (Sole Proprietorship)
Net profit from Schedule C is subject to both ordinary income tax and self-employment tax. For 2026, self-employment tax is 15.3% of net earnings: 12.4% for Social Security on the first $184,500 of net self-employment income, plus 2.9% for Medicare on all net earnings with no cap.19Social Security Administration. Contribution and Benefit Base20Internal Revenue Service. Self-Employment Tax (Social Security and Medicare Taxes) You calculate this on Schedule SE and then deduct half of the self-employment tax as an adjustment to income on your 1040.
Quarterly Estimated Tax Payments
DBA owners do not have taxes withheld from a paycheck, so you pay estimated taxes quarterly. If you expect to owe $1,000 or more at filing, you generally must send payments using Form 1040-ES. The 2026 due dates are April 15, June 15, September 15, and January 15, 2027.21Taxpayer Advocate Service. Making Estimated Payments
Underpaying triggers a penalty. The safe harbors: pay at least 90% of your current-year liability, or 100% of what you owed the prior year, whichever is smaller. If your prior-year adjusted gross income exceeded $150,000, the second safe harbor rises to 110% of last year’s tax.22Internal Revenue Service. Topic No. 306, Penalty for Underpayment of Estimated Tax Many new DBA owners get caught in their first profitable year because a tax bill is building silently between quarters.