Note: Business deduction rules are generally the same whether you file as a single-member LLC on Schedule C or as an S Corporation on Form 1120-S. The IRS requirements for what qualifies as a deductible business expense remain consistent across both filing methods—only the form where you report these deductions differs.

What you need to know

It's common to have subscriptions for everything from entertainment to essential services, each with a seemingly modest monthly fee. However, these costs can quickly accumulate, raising the question: "Are these subscriptions deductible on my business taxes?"

The answer isn't straightforward. According to IRS guidelines, to qualify as deductible, expenses must be both "ordinary and necessary" for your business operations.

Examples of Deductible Subscriptions

• Entertainment Industry Professionals: For individuals in the movie industry, such as videographers, scriptwriters, or talent scouts, a Netflix subscription used to monitor new releases and industry trends could  be considered an ordinary and necessary business expense.
   
• Content Creators: A YouTuber who subscribes to the platform to research competitors or industry trends could likely deduct the cost as it directly relates to and is necessary for their business operations.
   
• Health and Wellness Services: A traveling massage therapist who uses Spotify to play relaxing music during sessions could likely deduct the subscription because the music is integral to the service provided.
   
• Mental Health Professionals: A mental coach or physiotherapist using meditation apps like Calm or Headspace during client sessions could likely deduct these as necessary tools for their practice.
   

Examples of Non-Deductible Subscriptions

• General News and Finance Publications: Subscriptions to general newspapers and magazines such as The New York Times, Bloomberg, or Forbes are not typically deductible unless your profession requires constant engagement with financial markets or investment news, such as financial advisors or stock traders.
   
• Personal Entertainment: Subscriptions to services like Netflix, YouTube, Disney+, ESPN, and Spotify are not deductible if used for personal enjoyment or as background noise while working. These expenses are considered personal unless they directly contribute to your job functions. 

Disclaimer: The information contained in this document is provided for informational purposes only and should not be construed as legal, financial, or tax advice. It is not intended to be a substitute for obtaining legal, accounting, or other financial advice from an appropriate and/or licensed  adviser, or for the purpose of avoiding U.S. Federal, state or local tax payments and penalties.