Tax Deductions You Might Be Missing as a Small Business Owner

Many small business owners unintentionally overpay their taxes because they are not aware of what qualifies as a deductible expense. Understanding and tracking these deductions throughout the year can help reduce your taxable income and free up funds to reinvest in your business.

Home Office Expenses

If you use part of your home exclusively for business purposes, you may be eligible for the home office deduction. This includes a portion of rent, utilities, and internet based on the size of your dedicated workspace. Be sure the space is used regularly and solely for business to qualify.

Startup and Organizational Costs

Many business owners overlook deductions related to their initial setup. You may be able to deduct expenses for market research, licensing fees, legal setup, and professional consultations incurred before officially opening your doors.

Meals and Subscriptions

Business meals tied directly to client meetings or networking events may be partially deductible. Keep detailed records including the purpose, attendees, and date. Business-related subscriptions, including software, industry newsletters, and online tools, can also be written off.

Vehicle Use and Mileage

If you use a personal vehicle for business, such as visiting clients or delivering goods, you may deduct actual vehicle expenses or use the IRS standard mileage rate. Maintaining a mileage log helps support this deduction in the event of an audit.

Professional Services

Accounting, legal, marketing, and consulting services directly related to your business are deductible. This includes support you may receive in tax filing, business development, or systems management.

Working with a tax professional throughout the year, not just during filing season, can help ensure you are capturing all allowable deductions and staying ahead of changes in tax law.