What expense category is Airtable Expenses?

From project management and content calendars to complex data tracking, Airtable has become the go-to low-code platform for countless modern businesses. As this versatile tool becomes more integrated into daily operations, a key question arises for accountants and SMB owners: 

What is the correct way to classify Airtable expenses?

Properly categorizing these costs is essential for accurate budgeting, understanding your technology spend, and ensuring your business claims the correct deductions at tax time. This guide will explain how to classify Airtable expenses, the key IRS rules that apply, and the tax implications for your business.

Airtable Expense Category

Airtable is a cloud-based Software-as-a-Service (SaaS) platform. The fees your business pays for using Airtable fall squarely into the "Software and Subscriptions" expense category. This can also be classified under broader headings like "Technology Expenses" or "IT and Office Expenses," depending on your company's chart of accounts.

Because you are paying for access to a service rather than purchasing and owning the software outright, these costs are treated as a standard operating expense.

Key Rules for Classifying Airtable Expenses

To be deductible, all business expenses must meet specific IRS criteria. Here is how those rules apply to your Airtable subscription.

An Ordinary and Necessary Expense

The foundational test for any business deduction is that the cost must be both ordinary and necessary.

• An ordinary expense is one that is common and accepted in your trade or business.
• A necessary expense is one that is helpful and appropriate for your business.

For any business that needs to organize information, track projects, or manage workflows, a subscription to a platform like Airtable is a clear, ordinary, and necessary expense.

Subscription Service vs. Capital Asset

The most important distinction for software costs is whether they are a currently deductible expense or a capital asset.

• Currently Deductible Expense: This applies to recurring subscription fees. Because you are paying for the use of the Airtable service for a specific period (e.g., monthly or annually), the cost is considered an operating expense and can be deducted in the year it is incurred.
• Capital Asset: This applies to software that you purchase outright. For example, if you were to buy a perpetual software license, that would be a capital asset. The cost would need to be capitalized and then either depreciated over 36 months or expensed in the first year using the Section 179 deduction.

Since Airtable operates on a subscription model, its costs are currently deductible expenses.

Examples of Airtable Expenses

The following are common examples of costs from Airtable that fall into this expense category:

• Monthly or annual subscription fees for various Airtable plans (e.g., Team, Business, or Enterprise).
• Fees for adding more users or "seats" to an existing plan.
• Costs for premium "Extensions" or other paid add-on features.
• Fees for Airtable's professional services, consulting, or premium support.

Tax Implications of Airtable Expenses

Deductibility and Reporting

Fees paid for an Airtable subscription are fully deductible as an ordinary and necessary business expense in the year they are paid or incurred.

• For Sole Proprietors: These expenses are reported on Schedule C (Form 1040), typically under "Office expense" or as one of the "Other expenses".
• For Corporations and Partnerships: These are deducted as a standard operating expense on their respective business tax returns (e.g., Form 1120 or Form 1065).

Recordkeeping for Substantiation

The IRS requires that you keep clear records to prove all your business expenses. For your Airtable subscription, you must keep documentation that shows the amount paid, the name of the payee (Airtable), the date of payment, and proof of payment. The best records for this are:

• Monthly or annual invoices from Airtable.
• Credit card or bank statements showing the transaction.

Automate Your Software Subscription Tracking with Fyle

Manually tracking recurring invoices and payments for every SaaS tool your business uses, from Airtable to your CRM, is a time-consuming and error-prone process. Fyle is designed to put your technology spend on autopilot while ensuring perfect, compliant records.

• Never Miss an Invoice: Fyle’s integrations with Gmail and Outlook automatically identify and capture invoices from your software vendors the moment they hit your inbox, creating a documented expense entry without any manual work.
• Automate Card Expenses: For subscriptions charged to a corporate card, Fyle automatically creates and codes the expense, sending a notification for review and eliminating hours of manual reconciliation.
• Create a Compliant Audit Trail: By centralizing every invoice and proof of payment, Fyle builds the robust, audit-ready documentation required by the IRS to substantiate every technology and software expense you claim.
• Seamless Accounting Sync: Fyle syncs every categorized expense directly to your accounting software, including QuickBooks, NetSuite, Sage Intacct, and Xero, giving you an always-accurate, real-time view of your operational spend.

Focus on leveraging powerful tools like Airtable to run your business, and let Fyle handle the expense management.