Many professionals use LinkedIn to build their brand, network, and even look for job opportunities. With the paid subscriptions LinkedIn offers, users get access to additional features that can help them be more productive and successful on the platform. This leads to an important question – can you write off your LinkedIn subscription on your taxes?
What are the different LinkedIn subscription options?
LinkedIn offers three main paid subscription options for individual users:
Premium Career
The Premium Career subscription currently costs $29.99 per month if paying monthly or $239.88 per year if paying annually. With this plan, you get features like:
– Seeing who viewed your profile
– Contacting anyone without needing a paid LinkedIn Recruiter seat
– Getting insights on how you rank for profile searches
– Accessing more LinkedIn Learning courses
– Receiving a professional branding toolkit
Premium Business
The Premium Business subscription costs $47.99 per month billed monthly or $359.88 per year if paying annually. Features include:
– Seeing how you compare to other applicants for jobs
– Getting support to prepare for interviews and negotiate offers
– Contacting anyone without needing a paid LinkedIn Recruiter seat
– Seeing who viewed your LinkedIn posts
– Accessing more LinkedIn Learning courses
– Receiving a professional branding toolkit
Sales Navigator
The Sales Navigator subscription is $64.99 per month billed monthly or $779.88 per year if paying annually. With Sales Navigator, you get benefits like:
– Finding and contacting buyers at your target companies
– Seeing insights on your clients and accounts
– Getting alerts on key client updates
– Customizing your news feed to focus on sales info
– Accessing more LinkedIn Learning courses
– Receiving a professional branding toolkit
So in summary, LinkedIn offers tiered subscription plans depending on your needs, with prices ranging from $29.99 per month up to $64.99 per month.
Are LinkedIn subscriptions tax deductible?
Whether you can deduct your LinkedIn subscription fees on your taxes depends on how you use LinkedIn. Here are the key factors:
Using LinkedIn for business purposes
If you use LinkedIn primarily for business purposes, you may be able to deduct the subscription fees as a business expense. For example, if you have a LinkedIn Premium Career account to search for jobs, network with colleagues, promote your freelance services, or build your professional brand, those would generally be considered business uses.
But if you mainly use LinkedIn for personal activities like keeping in touch with friends and family, your subscription fees would not be deductible. The IRS requires business expenses to be “ordinary and necessary” to be tax deductible.
Being self-employed
Self-employed individuals can deduct business expenses like LinkedIn fees as part of their overall business deductions. This can lower both your income taxes and self-employment taxes.
But if you are an employee, LinkedIn fees are typically not deductible since employees cannot take business deductions. Exceptions may apply in some cases, like if your employer requires you to have a LinkedIn subscription.
Using the standard deduction vs. itemizing
You can only deduct specific business expenses like LinkedIn fees if you itemize your tax deductions. Claiming the standard deduction, which most taxpayers do, does not allow you to write off individual expenses.
So you would need to determine if your total itemizable expenses exceed the standard deduction amounts, which are $12,950 for single filers and $25,900 for married joint filers in 2022.
How to deduct LinkedIn fees
If your LinkedIn usage qualifies for a business deduction, here is how to deduct it on your tax return:
1. Choose your deduction method
You can deduct business expenses like LinkedIn fees using either the standard mileage rate method or actual expense method.
With the standard mileage rate, you deduct a set amount per mile driven for business in 2022, which is 58.5 cents per mile. This is simpler but may give a lower deduction amount.
The actual expense method allows you to deduct the actual amounts paid for expenses like LinkedIn subscription fees. But you need to have careful records.
2. Determine the deductible portion
If you use LinkedIn for both business and personal activities, you can only deduct the portion of fees related to your business use.
For example, if you estimate that 75% of your LinkedIn use is for business, you could deduct 75% of your total subscription fees.
3. Save receipts and records
Keep receipts and records showing your LinkedIn payment history and fees paid. Credit card and bank statements can serve as documentation.
Records should also track details like the subscription name, payment dates, and total amounts paid.
4. Fill out business deduction forms
The main IRS forms to fill out are:
– Schedule C (Form 1040) for self-employed business deductions or Schedule F (Form 1040) for farmers
– Form 2106 for unreimbursed employee business expenses
Enter your allowable LinkedIn expenses on the relevant forms when filing your tax return.
Examples of deducting LinkedIn fees
Here are some examples of how taxpayers could potentially deduct LinkedIn fees:
Self-employed marketing consultant
Olivia is self-employed as a marketing consultant and pays $29.99 per month ($359.88 annually) for a LinkedIn Premium Career subscription. She uses LinkedIn extensively to network with clients, promote her services, and build her brand.
Olivia can deduct 100% of her LinkedIn subscription fees on Schedule C when filing her Form 1040. This lowers both her income and self-employment taxes.
Employee required to use LinkedIn
Lee is an employee at a marketing agency. His employer requires him to have a paid LinkedIn account to connect with clients and prospects. Lee pays $64.99 per month for a Sales Navigator subscription.
While employees normally cannot deduct unreimbursed business expenses, Lee may qualify for a deduction here since LinkedIn is a required condition of his employment. He could deduct the fees on Form 2106.
Real estate agent with mixed use
Juan is a real estate agent who pays $47.99 per month ($359.88 annually) for a Premium Business subscription. He estimates that 60% of his LinkedIn use relates to his real estate business for networking, prospecting, and promoting open houses. The other 40% is personal use.
Juan can deduct 60% of his LinkedIn fees on Schedule C, since that represents his business usage percentage.
Taxpayer | Subscription | Use | Deduction Percent |
---|---|---|---|
Olivia | Premium Career | 100% business | 100% |
Lee | Sales Navigator | Required by employer | 100% |
Juan | Premium Business | 60% business, 40% personal | 60% |
Limits and considerations
If deducting LinkedIn fees, keep these potential limits and considerations in mind:
– You can only deduct the amount that exceeds 2% of your adjusted gross income
– Higher-income taxpayers may have deduction phaseouts
– Expenses must be ordinary and necessary for your profession to qualify
– Fees related to job searches may not be deductible if you are currently employed
– Personal use portions of LinkedIn fees are nondeductible
Consult a tax professional if you are unsure whether your LinkedIn expenses meet the IRS requirements for write-offs.
Conclusion
Many professionals use LinkedIn as an integral part of their business activities. With the paid subscriptions LinkedIn offers, users gain access to features that can provide a real boost to their career or business.
The good news is that if you use LinkedIn primarily for business purposes, you may qualify to deduct some or all of your LinkedIn subscription fees on your taxes. Just be sure to maintain careful records and fill out the appropriate deduction forms when filing your tax return. With proper documentation, writing off your LinkedIn fees can lower your tax bill.