This checklist ensures you don’t miss common (and often overlooked) tax deductions to minimize your taxable income.
Common Business Tax Deductions
- Home Office Deduction
- Regular and exclusive use of a space for business.
- Simplified ($5/sq ft up to 300 sq ft) or actual expenses (utilities, rent, etc.).
- Vehicle Expenses
- Standard mileage rate (IRS-set rate per mile) or actual expenses (gas, repairs, insurance).
- Track mileage with apps like MileIQ or a logbook.
- Supplies & Materials
- Office supplies (pens, paper, software).
- Raw materials (for product-based businesses).
- Equipment & Technology
- Computers, printers, phones (deduct 100% with Section 179 or depreciate).
- Software subscriptions (accounting, project management, CRM tools).
- Professional Services
- Legal fees, accounting, bookkeeping, tax prep.
- Business consulting or coaching.
- Advertising & Marketing
- Website costs, SEO, business cards, social media ads.
- Printing, signage, promotional events.
- Travel & Meals
- Travel: Flights, hotels, rental cars (50% deductible for non-local business trips).
- Meals: 50% deductible for business-related dining (client meetings, conferences).
- Insurance Premiums
- Liability, business property, and health insurance (if self-employed).
- Employee & Contractor Costs
- Salaries, wages, bonuses, benefits.
- 1099 contractor payments (must be tracked with W-9s).
- Rent & Utilities
- Office/storefront rent (or home office % if claimed separately).
- Internet, phone, electricity (business %).
- Retirement Contributions
- SEP IRA, Solo 401(k), or SIMPLE IRA contributions (deductible up to limits).
- Education & Training
- Workshops, courses, certifications to improve business skills.
- Subscriptions to industry publications.
- Bank & Loan Fees
- Credit card processing fees, interest on business loans.
- Bad Debts
- Unpaid invoices (if using accrual accounting).
- Depreciation
- Deduct large equipment or property costs over time (or use Section 179 for full deduction).
Often Overlooked Deductions
- Startup Costs
- Up to $5,000 in startup/legal fees (amortized if over limit).
- Self-Employment Tax Deduction
- Deduct 50% of self-employment (SE) tax.
- Charitable Contributions
- Donations from your business (rules differ from personal deductions).
- Tax Credits
- Research R&D credits, energy-efficient upgrades, or hiring incentives (e.g., Work Opportunity Tax Credit).
Pro Tips for Maximizing Deductions
- Keep receipts and records for at least 3–7 years (digital or physical).
- Track expenses by category (use accounting software like QuickBooks or Wave).
- Consult a CPA for complex deductions (e.g., R&D, home office, vehicle).
- Stay updated—tax laws change yearly (e.g., 2025 EV charging station credits).