Small Business Tax Deductions Checklist: 30+ Write-Offs You Should Know
Why Tax Deductions Matter
Business tax deductions reduce your taxable income, which directly lowers your tax bill. Every dollar of legitimate business expense you deduct is a dollar that isn't taxed. For a business in the 21% corporate tax bracket or an individual in the 24% bracket, a $1,000 deduction saves $210-240 in taxes. Keeping good records throughout the year and knowing what's deductible ensures you don't overpay.
Home Office Deduction
If you use part of your home exclusively and regularly for business, you can deduct a portion of your rent/mortgage, utilities, insurance, and maintenance. Use the simplified method ($5 per square foot, up to 300 sq ft = $1,500 max) or the regular method (actual expenses based on the percentage of your home used for business). The space must be used exclusively for business — a kitchen table doesn't qualify, but a dedicated home office room does.
Vehicle and Travel Expenses
Business use of your vehicle is deductible using either the standard mileage rate (varies yearly) or actual expenses (gas, maintenance, insurance, depreciation). Keep a mileage log with dates, destinations, and business purpose. Business travel — flights, hotels, 50% of meals, conference fees — is deductible when the primary purpose is business. Commuting from home to your regular workplace is not deductible, but travel to client sites and between work locations is.
Equipment, Supplies, and Technology
Section 179 allows you to deduct the full cost of qualifying equipment and software in the year of purchase (up to annual limits) rather than depreciating over years. This includes computers, furniture, machinery, vehicles, and off-the-shelf software. Ordinary supplies, shipping costs, professional books and publications, and business-related software subscriptions are also fully deductible. Cloud services, website hosting, and domain fees count too.
Professional Services and Insurance
Fees paid to accountants, lawyers, consultants, and other professionals for business purposes are fully deductible. Business insurance premiums — general liability, professional liability/E&O, workers' compensation, commercial property, and business interruption insurance — are deductible. Health insurance premiums for self-employed individuals and their families are also deductible as an above-the-line adjustment to income. Retirement plan contributions (SEP IRA, Solo 401k) can provide significant deductions while building your future.