Business Tax Deductions Every Small Business Owner Should Know
As a small business owner, maximizing your tax deductions is crucial for reducing your tax liability and keeping more of your hard-earned money. Here are essential deductions you should be aware of.
Common Business Deductions
- Home Office: If you use part of your home exclusively for business, you may deduct a portion of your home expenses
- Vehicle Expenses: Deduct either actual expenses or use the standard mileage rate (67 cents per mile in 2025)
- Business Meals: Generally 50% deductible when business-related
- Office Supplies and Equipment: Deductible in the year purchased or depreciated over time
- Professional Services: Legal, accounting, and consulting fees
- Insurance: Business insurance, health insurance for self-employed
- Retirement Contributions: SEP-IRA, Solo 401(k), or other qualified plans
Section 179 Deduction
The Section 179 deduction allows you to immediately deduct the full cost of qualifying business equipment (up to $1,160,000 in 2025) rather than depreciating it over time.
Record Keeping
Proper documentation is essential for claiming business deductions. Keep receipts, invoices, and detailed records of all business expenses. Consider using accounting software to track expenses throughout the year.
Common Mistakes to Avoid
- Mixing personal and business expenses
- Failing to keep adequate records
- Claiming deductions for expenses that aren't ordinary and necessary for your business
Our business tax specialists can help you identify all eligible deductions and ensure you're maximizing your tax savings while staying compliant.