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15 Tax Deductions Every Small Business Owner Should Know

Published April 2026

Small business owners often leave significant tax savings on the table simply by not knowing what they can deduct. The IRS allows businesses to deduct ordinary and necessary expenses, which can dramatically reduce your taxable income. Here are 15 deductions you should be claiming.

1. Home Office Deduction

If you use a portion of your home exclusively for business, you can deduct the expenses related to that space. Calculate the percentage of your home used for business and deduct that percentage of rent, mortgage interest, utilities, and insurance.

2. Vehicle and Mileage Expenses

Keep track of business-related driving. You can either deduct actual vehicle expenses (gas, maintenance, insurance) or use the standard mileage rate set by the IRS. As of 2026, the rate is approximately 70 cents per mile for business use.

3. Office Supplies and Equipment

Any supplies used for business operations are deductible. This includes office furniture, computers, software, printer ink, paper, pens, and other equipment. Equipment over certain thresholds may need to be depreciated over multiple years.

4. Professional Services

Fees paid to accountants, lawyers, bookkeepers, and consultants are fully deductible business expenses. Investing in professional help not only improves your business but provides immediate tax benefits.

5. Business Insurance

Premiums for liability, property, workers compensation, and professional insurance are all deductible. This is a critical business expense that is also tax-deductible.

6. Rent or Lease Payments

Office space, warehouse, equipment rental, or vehicle lease payments are deductible business expenses. These payments must be for property used in your business.

7. Internet and Phone Expenses

If you use internet or phone services for business, you can deduct a portion of these expenses. Keep clear documentation of business versus personal use.

8. Meals and Entertainment

Meals with clients, prospects, or employees related to business can be deducted at 50 percent. However, the rules have expanded recently, so consult with a CPA about current guidelines.

9. Travel Expenses

Business travel including flights, hotels, and transportation is fully deductible. The trip must be for business purposes, and you should document the business reason for the trip.

10. Advertising and Marketing

All costs associated with promoting your business are deductible. This includes website development, social media advertising, print ads, and promotional materials.

11. Business Education and Training

Courses, certifications, and training related to your business are deductible. This includes conference fees, online courses, and professional development.

12. Utilities and Maintenance

If you operate a commercial space, utilities, cleaning, repairs, and maintenance are all deductible business expenses.

13. Subscriptions and Software

Monthly subscriptions for software, platforms, and tools used in your business are fully deductible.

14. Business Bank Fees and Credit Card Processing

Fees charged by your bank, payment processors, and credit card companies are deductible business expenses.

15. Depreciation and Section 179

Equipment and assets have long useful lives can be depreciated. Section 179 allows you to deduct certain assets immediately in some cases rather than depreciating them over time.

Keep Good Records

The key to claiming these deductions is proper documentation. Keep receipts, invoices, and records for everything you deduct. The more organized your records, the easier it is for your CPA to maximize deductions and defend them if audited.

Many business owners discover they are leaving thousands in tax savings on the table. A professional bookkeeper and accountant ensure you capture every legitimate deduction available to your business.