The information in this article is up to date through tax year 2019 (taxes filed in 2020).
In today’s world there are subscriptions for everything. Meals, music, radio, tv, magazines, clothing and more can all be delivered to your door for a small monthly fee. The cost may seem inconsequential at first, but the charges can quickly add up. So, you may be wondering “can I deduct any of these services on my tax return?”
Are subscriptions tax deductible?
Yes, some subscriptions are tax deductible. If you own a business or are self-employed, you can deduct the following types of subscriptions as a business expense. Each subscription must be directly related to your business to be claimed as a deduction.
- Professional, technical, medical or trade journals or magazines related to your business
- Professional materials subscriptions, like ink or software
- Your business phone plan
- Your electricity, internet, or other plans that you use in a home office
- Your website hosting fees
- Dues to a professional subscription or organization
Learn more about filing as self-employed here.
Can I deduct subscriptions if I’m not a business owner or self-employed?
No. The Tax Cuts and Jobs Act eliminated all miscellaneous itemized deductions, including subscriptions related to:
- Unreimbursed employee expenses
- Job search
The new law went into effect in 2018 and will continue through 2025. It will return in 2026 unless another law is passed.
Not sure if you have a business or a hobby? Read more here.
Is my video streaming service (Netflix, Hulu, etc.) tax deductible?
It depends. If you own a business and use a video streaming service to entertain your guests, you may deduct it. For example, if you are an aspiring videographer have a YouTube subscription for business use, you may be able to deduct the service. It must be ordinary and necessary for your business, and only used for your business. You can’t use your business account for your personal use. If the IRS audits your return you need to be able to prove that the subscription meets these requirements.
Is my audio streaming service (Spotify, Apple Music, etc.)?
It depends. If you own a business and use an audio streaming service to entertain your guests, you may deduct it. For example, if you are a dentist and have a waiting room that you play music in, you can deduct the cost of the streaming service as a business expense. It must be ordinary and necessary for your business, and only used for your business. If you have a music streaming service that you use for both personal and business use, you can’t deduct it.
What other subscriptions can I deduct as a business owner?
As stated above, any subscription must be deemed ordinary and necessary for your business to be deducted on your return as a business owner. Here are some examples of other services specific businesses might be able to deduct:
Meal delivery (e.g. Blue Apron, Hello Fresh)
Here’s how the meal deduction works: an ordinary meal like lunch or dinner is not deductible (unless you are on a work trip). On the other hand, if you’re having a meal with a prospective client and you are discussing business, the expense could be partially deductible. Your meal delivery service is probably not deductible unless you use all the meals in the box for business functions.
Clothing subscription (e.g. Stitch Fix, Trunk Club)
These clothing services are probably not deductible. However, the IRS does have guidelines for what clothes can be deducted. If your job requires you to wear a uniform and that uniform is not suitable for everyday wear, you may be able to deduct the cost of the clothing as a business expense.
Many different types of businesses use Amazon to source supplies. For example, mechanics need mechanical parts, artists need creative supplies, and people with a home office need office supplies like paper, ink, and pens. If these groups order their supplies off of Amazon and only use the membership for business items, they can deduct the service on their return. Amazon offers a Business Prime account to encourage more owners to use the service to buy and sell the items they need for their business.
“I prepaid for a subscription for my business for three years. How do I deduct the fees on my tax return?”
If you paid for a subscription for more than one year in advance, prorate the cost for each year to deduct a single year on your tax return. Determine how much on average you pay for the subscription on a monthly basis and multiply it by 12.
Where do I deduct subscriptions on my tax return?
Deduct your business expenses on Form 1040 Schedule C under “other expenses”. Schedule C will help you figure out your net profit so you can add it as income on your form 1040. Your net profit includes your gross income minus any tax credits or deductions you can claim.