Running a small business comes with numerous tax advantages, but many business owners leave money on the table by overlooking valuable deductions. Here are ten commonly missed tax deductions that could save you thousands.
1. Home Office Deduction
If you use a portion of your home exclusively for business, you can deduct a percentage of your rent or mortgage, utilities, and maintenance costs. The simplified method allows $5 per square foot, up to 300 square feet.
2. Vehicle Expenses
Business-related driving can be deducted using either the standard mileage rate (67 cents per mile in 2024) or actual expenses. Keep detailed mileage logs to maximize this deduction.
3. Professional Development
Courses, certifications, books, and conferences that improve your business skills are fully deductible. This includes online courses and industry memberships.
4. Health Insurance Premiums
Self-employed individuals can deduct 100% of health insurance premiums for themselves and their families, including dental and long-term care insurance.
5. Retirement Contributions
Contributions to SEP-IRAs, SIMPLE IRAs, or Solo 401(k) plans reduce your taxable income while building retirement savings. Limits are generous for self-employed individuals.
6. Business Insurance
Premiums for liability insurance, professional indemnity, and business property insurance are all deductible business expenses.
7. Software Subscriptions
Monthly subscriptions for accounting software, project management tools, cloud storage, and other business applications are fully deductible.
8. Bank Fees and Interest
Business bank account fees, credit card processing fees, and interest on business loans are deductible expenses often overlooked.
9. Marketing and Advertising
Website costs, social media advertising, business cards, and promotional materials are all deductible marketing expenses.
10. Professional Services
Fees paid to accountants, lawyers, consultants, and other professionals for business purposes are fully deductible.
Work With a CPA
A qualified CPA can help you identify all applicable deductions and ensure you're maximizing your tax savings while staying compliant. Find a CPA near you to get personalized tax advice.