Year-End Write-Offs That Actually Hold Up

Written By Stoy Hall

You want real write-offs—not wishful thinking that gets torched in an audit. Here’s the clean, defensible approach I use with owners who care about results and receipts.

First, what changed for 2025 (fast)

  • 100% bonus depreciation is back for qualifying assets placed in service in 2025, with a quirky retroactive window early in the year under the new federal law. Translation: big equipment and technology buys may be fully deductible again instead of phased out over years. Confirm exact effective dates with your CPA before pulling the trigger because reporting has cited different start days in January.

  • Section 179 limits are much higher for 2025 than previous years (with a larger phase-out). That’s separate from bonus depreciation and can be used on a wide range of tangible business property.

Bottom line: You may be able to expense more—fast—but only if the asset and timing actually qualify. Don’t “buy for the write-off” unless the purchase makes business sense on its own.

The write-offs that stand up (and the traps to avoid)

1) Tangible items under the de minimis safe harbor

  • If your written policy says you expense items $2,500 or less per item (or per invoice line), you can deduct those immediately. With an applicable financial statement, that threshold can be $5,000. You must make the election each year with your return. Keep the invoice lines clean.
    Trap: Sloppy invoices that bundle multiple items—ask vendors to split lines so each < $2,500.

2) Home office deduction (only if it’s real)

  • If you use part of your home regularly and exclusively for business, the simplified method lets you deduct $5 per square foot up to 300 sq ft. It’s easy and avoids depreciation recapture issues.
    Trap: “Sometimes I work at the kitchen table” is not exclusive use. Pick a dedicated space.

3) Accountable plan reimbursements (W-2 employees, including owner-employees)

  • Set a written accountable plan so mileage, travel, home-office Internet, and small tools are reimbursed tax-free when timely substantiated. Without an accountable plan, reimbursements are taxable wages. Keep receipts and expense reports.
    Trap: Venmo’ing employees without documentation. That’s payroll, not a deduction shortcut.

4) Repairs and maintenance vs. improvements

  • Repairs that keep property in working order are generally deductible; improvements that better, restore, or adapt property usually must be capitalized (then depreciated or bonus-depreciated). The tangible property regulations include a safe harbor for small taxpayers for certain building expenses—use it if you qualify.
    Trap: Calling a remodel a “repair.” If you improved useful life or capacity, expect capitalization.

5) Vehicles

  • Deduct actual expenses or use the standard mileage rate; don’t double dip. Section 179/bonus on heavy SUVs/vans may be available if the vehicle is truly over the weight limits and business-use tests are met. (Limits change—verify before purchase.)
    Trap: Personal trucks pretending to be business vehicles. Track business percentage like a hawk.

6) Software and subscriptions

  • Most recurring SaaS is currently deductible. Large, multi-year license buys may be capitalized then amortized unless rules allow immediate expensing. Keep start/end dates and user counts on file.

7) Education and professional fees

  • Training that maintains or improves current skills (not qualifying you for a new trade) is usually deductible. Legal, accounting, and consulting fees tied to the business are deductible when paid.

Action plan: 90 minutes to lock your year-end deductions

Minute 0–15: Put policy in writing

  • Draft a one-pager with:

    • De minimis threshold (e.g., “Expense tangible items costing ≤ $2,500 per item/line”).

    • Capitalization policy (e.g., “Capitalize items > $2,500; depreciate per MACRS unless bonus/§179 elected”).

    • Accountable plan summary (who, what, documentation, submission deadlines).
      File it with your year-end workpapers and actually follow it.

Minute 15–45: Clean your documentation

  • Pull 12 months of bank/credit card statements into one folder.

  • For any transaction > $75 (and travel/meals regardless), attach the itemized receipt to the bookkeeping entry.

  • Make sure invoice lines show per-item prices to support the de minimis election.

  • Tag each asset purchase as Repair or Capitalize with a short explanation.

Minute 45–65: Decide on big-ticket assets

  • If you genuinely need equipment/technology, confirm:

    • Placed-in-service date will be in 2025.

    • Asset qualifies for 100% bonus depreciation or Section 179 based on cost, use, and taxable income limits.

    • Section 179 phase-out won’t bite if total purchases are very large for your size.

Minute 65–80: Home office and vehicle

  • Draw your home office floor plan with measurements; archive photos showing exclusive use; elect the simplified method if it fits.

  • Export your mileage log; if you don’t have one, reconstruct from calendars + map history and fix your 2026 habit on Jan 1.

Minute 80–90: Year-end checklist

  • Submit all accountable plan expenses by company policy deadline (set one! e.g., 30 days).

  • Re-classify any personal charges that slipped into the business.

  • Save a PDF of your written policies, receipts binder index, and fixed asset list. The IRS loves organized taxpayers.

Resource links

Audit-Proof Write-Off Workshop

In 60 minutes, we’ll tighten your capitalization policy, lock your de minimis threshold, choose §179 vs. bonus for 2025 asset buys, and implement a receipts workflow that stands up under scrutiny.

Deliverables you leave with:

  • One-page written policy (capitalization, de minimis, accountable plan)

  • Fixed-asset tagging plan for 2025 purchases

  • Receipt/recordkeeping checklist and folder structure

  • 30-day action list to clean up books and documentation

Ready to make your deductions defensible?

Schedule Here
Stoy Hall https://blackmammoth.com
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