There’s a long list of potential business deductions to lower your taxes, from the well-known to some more obscure items. Below is a list of many of the most common, along with some less familiar options.
Of course, this requires the usual disclaimer: This is for informational purposes; it’s not intended as tax advice. As far as taxes are concerned, so many individual factors affect what you can and can’t deduct, and rules can change from year to year, so there’s no such thing as one-size-fits-all information.
Read this over to get better acquainted with the types of business deductions that are often available, then discuss those that may be relevant with your tax professional. They’ll let you know if you’re eligible, what conditions must be met to make the claim, what forms have to be filled out, and what records or other documentation you’ll need to back it up.
And just as a friendly reminder: Keep all your receipts, and file them away in an organized fashion!
Tax Deductions for Business Owners
- Office supplies – Most supplies required for day-to-day business operations can be claimed as business expenses.
- Office equipment – Desktop computers, laptops, copy machines, scanners, and other equipment is also tax deductible. Items may be claimed all at once for larger one-time tax savings, or depreciated to spread out the deductions over several years.
- Software and subscriptions – Expenses like computer programs, applications, internet and other online service subscriptions, and industry or professional magazine subscriptions can be claimed to reduce your small business tax burden.
- Office furniture – Desks, chairs, meeting tables, and other workplace furniture is a legitimate business expense. These pricier items may also be claimed in their entirety or depreciated.
- Rent – If you pay rent for your business’ offices, building, or other property, the cost of that rent may be written off.
- Utility bills – Electricity, water, telephone, and dedicated business mobile phone charges are other standard expenses that can help reduce what you own in taxes.
- Home office – If you have a home office used exclusively for work, the cost of that portion of your home’s space, utilities, and renter’s/homeowner’s insurance are tax deductible. A second, dedicated business telephone line in your home is also a write-off.
- Vehicle mileage – Mileage and tolls paid for business travel may be claimed on your return, or you can claim the business-use portion of your total auto expense for the year.
- Advertising and promotion expenses – 100 percent of the money spent to advertise and promote your small business is fair game to claim.
- Salaries and benefits – All outlay for employees’ wages, bonuses, commissions, PTO, and other benefits is deductible.
- Payments to independent contractors – Money spent on compensation for freelance or contract labor and services is another expense you can claim on your business taxes.
- Business meals – If you dine out for professional purposes, half the cost of the meal may be written off.
- Business travel expenses – When traveling for business purposes, most of the associated costs are tax deductible. This includes tickets for transportation, rental cars, hotel bills, 50 percent of the cost of food, dry cleaning, and more.
- Retirement fund contributions – Money deposited into most types of retirement accounts—with Roth IRAs being a notable exception—is not taxed, generally until it’s withdrawn.
- Business insurance premiums – You’re permitted to deduct the cost of your business insurance premiums.
- Business interest and bank fees – These charges can be written off when associated with your business bank accounts, credit cards, and loans.
- Taxes and business fees – Real estate taxes on your business property, regulatory expenditure, licensing fees, and similar costs are another type of useful write-off.
- Legal and professional fees – Payments to your accountant, financial advisor, attorney, and some other professionals are deductible business expenses. If you’re also advised on personal matters, only the portion of fees related to business may be claimed.
- Educational expenses – Continuing education courses, seminars, webinars, workshops, certifications, books, and similar educational coursework, events, or materials are tax deductible if they focus on knowledge and skills that benefit your business.
- Charitable donations – Contributions to qualifying organizations are tax deductible. Corporations claim donations on their corporate tax return, while other entities like LLCs, S Corps, sole proprietorships, and partnerships claim them on their personal return.
