Expenses & approvals
What counts as a business expense?
By the Mylo team · Last updated July 1, 2026
Short answer
A business expense is a cost that is ordinary and necessary for running your business: common in your line of work and helpful to the business. Think supplies, software, business travel, marketing, and professional services. Personal costs do not count, and mixed-use costs must be split.
The classic test is whether a cost is ordinary (normal for your industry) and necessary (appropriate and helpful for the business). That covers a wide range: office supplies, software subscriptions, business travel and lodging, advertising, contractor and professional fees, and equipment used for work.
Personal spending is not deductible, and expenses that mix business and personal use (like a phone or a car) generally have to be split so you only claim the business portion. Some categories, such as meals and entertainment, have their own limits and rules.
The practical challenge is not knowing the definition, it is keeping the records to back it up. Mylo categorizes each expense as it captures the receipt and keeps the itemized digital copy, so your business costs are sorted and audit-ready. Check current IRS guidance for how specific categories are treated.
How it works in Mylo
- Apply the ordinary-and-necessary test: is the cost normal for your work and helpful to the business?
- Include common categories: supplies, software, travel, marketing, equipment, and professional services.
- Exclude personal costs, and split anything with mixed business and personal use.
- Watch special categories like meals, which carry their own limits.
- Keep an itemized record for each expense so the deduction can be substantiated.
Best practices
- Use a dedicated business card so personal and business spending stay separate.
- Categorize expenses as they happen rather than sorting a year's worth later.
- Let Mylo categorize and store each receipt so your records are ready if the IRS asks.
- Confirm gray-area expenses with your accountant or current IRS guidance.