These are the Small Business Tax Deductions You Need to Know
19 Common Tax Deductions Every Small Business Owner Should Know
Knowing which expenses you can deduct (“write off”) on your business taxes can help you not only at tax time, but throughout the year, in terms of budgeting and financial planning. Whether you’re a solopreneur, freelancer, or managing a small team, here are 19 common business deductions that can save you money and reduce your taxable income.
Office and Equipment-Related
1. Office Supplies & Expenses
This includes paper, postage, shipping, printer ink—anything you use regularly to keep your business running.
2. Rent or Lease Payments
Renting an office or coworking space? Leasing equipment? Those costs are fully deductible.
3. Home Office Deduction
If you work from home and have a dedicated office space at home, you can deduct a portion of your rent/mortgage, utilities, and more. The IRS also offers a simplified option of $5 per square foot (up to 300 sq. ft).
4. Business-related Utilities
Business-related expenses like electricity, water, internet, and phone service count—just make sure to separate personal use from business use.
5. Equipment & Depreciation
Laptops, monitors, desks, and similar equipment can be deducted either in full, or for more expensive items, over time through depreciation. When an item is at least $2,500, it is generally depreciated over time, but talk to an accountant to determine what makes sense for your business.
6. Software & Subscriptions
Zoom, Canva, bookkeeping software—if it helps you run your business, it’s likely deductible.
Vehicles, Travel, Meals & Entertainment
7. Vehicle Expenses
If you use your car for business, you can deduct either actual expenses or take the standard mileage deduction. Track everything carefully to get the most out of this one.
8. Business Travel
Traveling for work? Flights, hotel stays, transportation, and even meals (typically 50% deductible) can be written off—just keep receipts and records.
9. Meals & Entertainment
Typically up to 50% of business-related meals can be deducted, but entertainment expenses are generally no longer deductible. The new rules are a bit complicated. See our Guide to Deductions for Meals & Entertainment.
Expenses for Staff, Contractors, other Professionals
10. Independent Contract Labor
Hired independent contractors or freelancers? You can deduct what you pay them. Don’t forget to issue 1099-NEC forms for those paid over $600 in a year.
11. Wages & Salaries
If you have employees, their wages, benefits, and bonuses are all deductible business expenses.
12. Payroll Taxes
You can also deduct the employer portion of payroll taxes, including Social Security, Medicare, and unemployment tax.
13. Legal & Professional Fees
Payments to lawyers, accountants, and consultants are deductible if they’re business-related.
Other categories
14. Advertising & Marketing
From website hosting and design to social media ads and printed flyers, your promotional expenses can usually be written off.
15. Continuing Education
Books, workshops, webinars, and certification programs that help you improve or maintain your professional skills are deductible.
16. Business Insurance
Liability insurance, professional indemnity, and workers’ comp premiums are all considered necessary and deductible expenses.
17. Business Credit Card Interest and Bank Fees
If you take out a business loan, or use a business credit card and don’t pay in full, you will likely be charged interest, and possibly fees. You can deduct these amounts.
18. State and Local Taxes and Fees
These include business-related state income taxes or fees, including business license fees and taxes.
19. Charitable Contributions
You can deduct contributions and donations that your business makes to 501c3 charities and non-profits.
Pro Tips for Maximizing Your Deductions
- Track everything: Use bookkeeping software or hire a bookkeeper or accountant (CPA).
- Separate business and personal expenses: A dedicated business bank account and credit card make this easier.
- Keep receipts: Digital copies are fine—just make sure you can substantiate any deductions you claim.
- Check with a tax professional: Tax laws change, and a good CPA can help you stay compliant and maximize your savings.
Further Resources
How Do Taxes Work for a Small Business Owner in the United States?
How Do Self-Employment Taxes Work?
How Do Taxes Work for Freelancers?
Guide to the Law for Entrepreneurs and Small Business Owners
Guide to Tax Controversies and Disputes
Tax Treatments for Small Business
