What counts?
- Accounting software (QuickBooks, Xero, Hivebooks)
- Communication tools (Slack, Zoom, Google Workspace)
- Design tools (Adobe CC, Figma, Canva Pro)
- Project management (Asana, Monday, Notion)
- Email marketing (Mailchimp, ConvertKit)
- Cloud storage (Dropbox, Google Drive, iCloud)
- Website hosting and domain registration
- CRM software (HubSpot, Salesforce)
If you use a subscription for both business and personal (like a personal Dropbox that also has work files), deduct only the business-use percentage.
Monthly vs. annual subscriptions
Both are deductible. Monthly subscriptions are deducted as you pay them. Annual subscriptions paid upfront are deductible in the year you pay (for most small businesses on cash-basis accounting).
If you buy a perpetual software license (not a subscription), you can deduct the full cost under Section 179 or amortize it over 3 years.
Example
Your monthly business subscriptions:
- Google Workspace: $14/mo
- Zoom: $16/mo
- Adobe CC: $55/mo
- Slack: $8/mo
- Hosting: $20/mo
Total: $113/mo = $1,356/year in deductions
IRS Reference
SaaS subscriptions are deductible under IRS Revenue Procedure 2000-50 as ordinary business expenses. Report on Schedule C, Line 18 (Office expense) or Line 27a (Other expenses).
SaaS subscriptions are deductible under IRS Revenue Procedure 2000-50 as ordinary business expenses. Report on Schedule C, Line 18 (Office expense) or Line 27a (Other expenses).
Track all your subscriptions in one place
Hivebooks auto-categorizes your recurring SaaS charges when you connect your bank. See exactly how much you're spending on tools every month.
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