Running a small business comes with its fair share of expenses, but the good news is that many of these costs are tax-deductible. However, many business owners miss out on valuable deductions simply because they’re unaware of them. To help you maximize your tax savings, TruTaxx Solutions has compiled a list of commonly overlooked small business tax deductions.
1. Home Office Deduction
If you operate your business from home, you may qualify for a home office deduction. To be eligible, the space must be used exclusively for business purposes. The IRS offers two methods for calculating this deduction:
- Simplified Method: Deduct $5 per square foot, up to 300 square feet.
- Regular Method: Deduct a portion of rent, mortgage interest, utilities, and property taxes based on the percentage of your home used for business.
2. Business Mileage
Do you drive for business-related purposes? If so, you can deduct mileage for trips related to client meetings, deliveries, and other work-related travel. For 2024, the IRS standard mileage rate is 67 cents per mile. Be sure to keep a log of your trips, including dates, destinations, and purpose.
3. Office Supplies & Equipment
Everyday expenses such as pens, notebooks, and printer ink are deductible, but don’t forget about larger purchases. Items like computers, software, and office furniture can often be deducted in full under Section 179, rather than depreciated over several years.
4. Professional Services
If you hire accountants, consultants, or legal professionals to support your business, their fees are fully deductible. This also includes the cost of tax preparation services—so keeping TruTaxx Solutions on your side not only ensures compliance but also saves you money!
5. Employee Salaries & Benefits
Wages, bonuses, and even certain employee benefits like health insurance and retirement plan contributions are deductible business expenses. If you’re self-employed, you can also deduct contributions to your own SEP IRA or Solo 401(k).
6. Marketing & Advertising
Every dollar you spend on promoting your business is tax-deductible. This includes:
- Website design and hosting fees
- Social media ads
- Print and online advertisements
- Business cards and promotional materials
7. Business Insurance
General liability insurance, professional liability coverage, and even cyber insurance can all be deducted as necessary business expenses. Protecting your business financially also helps reduce your taxable income.
8. Travel & Meals
If you travel for work, airfare, lodging, and meals related to business trips are deductible. However, meals are only 50% deductible unless provided at a company event. Be sure to keep receipts and note the business purpose of each expense.
9. Education & Training
Investing in your professional growth? Whether it’s an industry conference, online course, or certification program, these expenses may be fully deductible if they maintain or improve your business skills.
10. Bad Debt & Unpaid Invoices
If a client fails to pay for services rendered, you may be able to write off the unpaid amount as bad debt. This is particularly useful for businesses that extend credit to customers.
Maximize Your Deductions with TruTaxx Solutions
Navigating small business tax deductions can be complicated, but you don’t have to do it alone. At TruTaxx Solutions, we specialize in helping small business owners reduce their tax burden and stay compliant. Schedule a FREE consultation today to ensure you’re taking advantage of every deduction available!
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