Running a small business comes with enough challenges without leaving money on the table at tax time. Understanding which expenses you can deduct — and which often-overlooked deductions you’re missing — can make a meaningful difference to your bottom line.
Below we’ve outlined both the well-known deductions and some creative, but fully legal opportunities to consider before you file your next return.
Commonly Known Small Business Deductions
These are the staples most small business owners know:
- Home Office Deduction (if part of your home is used regularly and exclusively for business).
- Office Supplies & Software (computers, printers, subscription-based apps).
- Business Insurance (liability, E&O, cyber).
- Advertising & Marketing Costs (website hosting, ads, promotional materials).
- Business Travel & Meals (50% deductible for meals with a business purpose).
- Employee Wages & Contractor Payments (including employer payroll taxes).
- Utilities & Rent (if renting an office, or proportional utilities for home office).
- Professional Fees (legal, accounting, consulting).
Overlooked or Creative Deductions
Even savvy owners miss these:
- Health Insurance Premiums for Owners (if self-employed and not eligible for employer coverage).
- Retirement Contributions (SEP IRA, Solo 401(k), SIMPLE IRA) — often overlooked in profitable years.
- Education & Training (courses, certifications, seminars directly related to your trade).
- Business Use of Personal Vehicle (mileage log or actual expenses — often underclaimed).
- Start-Up & Organizational Costs (if your business is new).
- Bank & Payment Processing Fees (merchant service fees, credit card annual fees for business cards).
- Client Gifts (up to $25 per recipient per year is deductible).
- Cell Phone & Internet Proportion (business-use portion of personal plans).
- State & Local Taxes on Business Property (including business licenses).
- Depreciation/Bonus Depreciation on Equipment (Section 179).
Tips for Maximizing Deductions
- Keep Great Records: Documentation is key for every deduction.
- Review Annually: New tax laws can add or remove opportunities.
- Plan With Your CPA: Proactive planning often saves more than retroactive filing.
If you’re not sure which deductions apply to you, we can help you identify them before filing season. Working with Colorado Wealth Group where a CPA is in-house provides active tax planning. Every business owner should know that is key!
