Most small business owners leave money on the table every year. After reviewing hundreds of returns, our CPA team consistently finds these deductions being underused or completely overlooked. Here is your guide to claiming everything you are entitled to.
If you use a dedicated space in your home regularly and exclusively for business, you qualify for the home office deduction. There are two methods:
The space must be used regularly and exclusively for business. A guest bedroom that doubles as an office does not qualify. A dedicated room with a desk and no bed does.
Every mile you drive for business purposes is deductible. The 2025 IRS standard mileage rate is 70 cents per mile (the 2026 rate is typically announced in December and may change). You can use either:
Do not forget to include parking fees and tolls - these are deductible on top of either method. Commuting from home to a regular office is not deductible, but driving between client sites, to the bank, or to the office supply store all count.
Keep a mileage log. Record the date, starting location, destination, business purpose, and miles for each trip. Apps like MileIQ or a simple spreadsheet work fine. Without a log, the IRS can disallow your entire mileage deduction.
If you are self-employed and not eligible for coverage through a spouse's employer plan, you can deduct 100% of your health, dental, and vision insurance premiums for yourself, your spouse, and your dependents.
This is an above-the-line deduction, meaning it reduces your adjusted gross income (AGI) directly - you do not need to itemize to claim it. It also reduces your self-employment tax base indirectly by lowering your income.
This deduction applies whether you purchase insurance through the marketplace, a private insurer, or a professional association plan. It does not apply to months where you were eligible for employer-subsidized coverage.
Contributing to a retirement plan is one of the most powerful tax deductions available to self-employed individuals. You get an immediate deduction plus tax-deferred growth on your investments.
Many business owners do not realize they can still set up and fund a SEP-IRA for the prior year up until the tax filing deadline (including extensions).
Business meals are 50% deductible when directly related to or associated with your trade or business. This includes meals with clients, prospects, vendors, and employees when business is discussed.
To substantiate the deduction, keep records of:
Write these details on the back of the receipt or log them in an app immediately. A credit card statement alone is not sufficient documentation.
Education and training expenses that maintain or improve skills required in your current business are fully deductible. This includes:
The key requirement is that the education must relate to your current business. An accountant taking an advanced tax course qualifies. An accountant taking a course to become a dentist does not.
Nearly every business relies on software tools today, and most of those subscriptions are deductible. Common examples include:
If a subscription is used for both personal and business purposes (like a phone plan), deduct only the business-use percentage.
Fees paid to professionals who help you run your business are fully deductible. This includes:
Even the fee you pay to have your business tax return prepared is deductible. Keep all invoices and receipts from your service providers.
When you purchase equipment, furniture, vehicles, or software for your business, you can often deduct the full cost in the year of purchase rather than spreading it over several years.
Without Section 179 or bonus depreciation, a $10,000 computer system might be depreciated over 5 years at $2,000 per year. With Section 179, you deduct the full $10,000 in Year 1.
Premiums paid for insurance that protects your business are fully deductible as ordinary and necessary business expenses. Commonly deductible policies include:
If you have a home-based business, your homeowner's policy does not cover business property or liability. A separate business policy is both a smart investment and a deductible expense.
Always keep receipts and documentation for every business deduction you claim. The IRS requires substantiation for all business expenses, and in an audit, the burden of proof is on you. A good rule of thumb: if you cannot prove it, do not deduct it. Digital copies of receipts are acceptable - use a scanner app or dedicated expense-tracking software to stay organized throughout the year.
Not sure which deductions apply to your situation? Our CPA team reviews your business finances and identifies every deduction you qualify for - at no cost for the initial consultation. We have helped hundreds of small business owners reduce their tax bills by thousands of dollars.
Schedule your free consultation today. We will review your business and show you exactly where you can save.
