The Ultimate Tax Deduction Checklist for Small Businesses

Taxes can take a big bite out of your profits—but only if you let them. The good news? The IRS allows small businesses to deduct a variety of expenses to lower taxable income. The key is knowing which deductions apply to you and how to document them correctly to avoid IRS headaches.

This guide breaks down every major tax deduction small business owners should know. Ready to keep more money in your pocket? Let’s dive in.

1. Home Office Deduction

If you use a portion of your home exclusively for business, you can deduct expenses like:

• Mortgage interest or rent (business percentage only)

• Utilities (electricity, water, internet)

• Homeowners insurance

• Repairs & maintenance (related to the office space)

📌 Tip: Use the simplified method ($5 per square foot, up to 300 sq. ft.) or calculate actual expenses.

2. Business Vehicle Expenses

Do you use your car for business? Deduct mileage or actual expenses:

• Standard mileage rate: 67 cents per mile (2024 IRS rate)

• Actual costs: Gas, maintenance, insurance, lease payments, depreciation

📌 Tip: Keep a mileage log to support your deductions!

3. Office Supplies & Equipment

Anything used exclusively for business is deductible:

• Computers, printers, office furniture

• Software subscriptions (QuickBooks, Adobe, etc.)

• Pens, paper, postage, business cards

📌 Tip: Equipment over $2,500 may need to be depreciated over time.

4. Internet & Phone Expenses

If you use your phone and internet for business, deduct the business percentage of:

• Cell phone bills

• Internet service

• Business landlines

📌 Tip: If your phone is used for both personal and business, estimate your business-use percentage.

5. Advertising & Marketing

Any costs spent on promoting your business are fully deductible:

• Website hosting & design

• Social media ads (Facebook, Google, LinkedIn)

• Business cards & branding materials

• Email marketing software (Mailchimp, ConvertKit)

📌 Tip: Keep receipts and records of marketing campaigns to justify expenses.

6. Business Travel Expenses

If you travel for business purposes, you can deduct:

• Flights, trains, rental cars

• Hotels & lodging

• 50% of meals (business-related only)

• Conference fees & industry events

📌 Tip: Keep detailed records—who, what, where, when, and why!

7. Meals & Entertainment

Business meals are 50% deductible when:

• You discuss business with a client, partner, or employee

• The meal isn’t extravagant

📌 Tip: Write who you met with and the purpose on the receipt!

8. Employee Salaries & Contractor Payments

If you have employees or hire contractors, their wages are deductible:

• Employee salaries

• Contractor payments (must issue 1099-NEC for freelancers paid over $600)

• Payroll taxes (Social Security, Medicare)

📌 Tip: Use payroll software like Gusto to track payments and stay IRS-compliant.

9. Health Insurance & Retirement Contributions

Certain self-employed health insurance and retirement plans offer tax deductions:

• Self-employed health insurance (medical, dental, vision)

• HSA contributions (if you have a high-deductible health plan)

• SEP IRA, Solo 401(k), SIMPLE IRA contributions

📌 Tip: Contributions reduce taxable income and help you build long-term wealth!

10. Professional Fees & Education

Investing in your skills and business is deductible:

• Accounting, legal, and consulting fees

• Continuing education & certifications

• Business books & industry courses

• Membership dues (chamber of commerce, networking groups)

📌 Tip: Subscriptions to professional journals and online learning platforms like Udemy count too!

11. Business Insurance

Protecting your business is tax-deductible:

• General liability insurance

• Professional liability (E&O insurance)

• Workers’ compensation insurance

📌 Tip: Even cyber liability insurance counts if your business operates online.

12. Interest & Bank Fees

Deductible financial expenses include:

• Business loan interest

• Credit card interest (business-related purchases only)

• Bank fees & merchant processing fees (Stripe, PayPal, Square)

📌 Tip: Keep business and personal finances separate for cleaner bookkeeping.

Final Thoughts: Keep More, Pay Less

Every dollar you legitimately deduct lowers your taxable income and puts more money back into your business. The key is proper documentation—so keep records, use accounting software, and don’t leave deductions on the table.

If you’re a meticulous record-keeper, you can handle this yourself. But if you’d rather focus on growing your business (or going hiking instead of sorting receipts), I can help—https://www.glavinicfs.com/bookandrew.