Is 1Password Tax Deductible? Yes — 100% Deductible for Self-Employed
100%
Deductible
Line 18
Schedule C
Office expense
Category
$3–$8/mo
Typical cost
1Password is a fully deductible business expense for self-employed individuals and single-member LLCs. Since password management software protects your business accounts and data, the IRS considers it ordinary and necessary, making the monthly subscription cost eligible for a tax deduction on Schedule C.
Who qualifies?
You qualify if you're a self-employed individual, freelancer, or single-member LLC using 1Password to secure business accounts and client data. Business use must be primary; personal-only subscriptions don't qualify.
How to claim it
- 1 Track your 1Password monthly or annual subscription costs throughout the tax year (typically $3–$8/month).
- 2 Sum your total annual 1Password expenses and enter the amount on Schedule C, Line 18 (Office expense).
- 3 Keep your subscription receipts and credit card statements as documentation in case of an IRS audit.
Pro tip
If you pay annually instead of monthly, you'll save ~15% on your 1Password subscription while creating a clear, single deduction entry. Document the business purpose in your records by noting 'Password management for client accounts' to strengthen your deduction if audited.
Source: IRS Publication 535: Business Expenses
Judy automatically tracks 1Password
Connect your business bank account and Judy categorizes 1Password charges to Office expense (Line 18) — no spreadsheets, no manual entry. Get a free 30-day audit first, then subscribe.
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