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💼 Top Business Tax Deductions Business tax deductions reduce your taxable income, lowering the amount of tax you owe. Claiming the right deductions is key to maximizing your savings and staying compliant with IRS rules. Here’s a comprehensive list of common business tax deductions (for sole proprietors, LLCs, S corps, and other business types): 💼 Top Business Tax Deductions 1. Home Office Deduction If you use part of your home exclusively and regularly for business. You can use simplified ($5/sq ft up to 300 sq ft) or actual expense method. 2. Business Use of Vehicle Deduct either: Standard mileage (2025 rate: TBD; 2024 was 67 cents/mile for business) Actual expenses (gas, maintenance, insurance, depreciation) Must keep a mileage log. 3. Office Supplies & Expenses Paper, pens, postage, printer ink, etc. Computers, monitors, and software may qualify as capital expenses or be fully deductible under Section 179. 4. Utilities & Internet Business portion of phone, electricity, water, internet, etc. For home offices, must prorate based on office use. 5. Rent or Lease Payments Includes office or retail space, machinery, equipment, and vehicles leased for business. 6. Salaries & Wages Employee salaries, bonuses, commissions, and employer-paid benefits (health insurance, retirement contributions, etc.). 7. Contract Labor (1099s) Payments to freelancers and independent contractors. Report using Form 1099-NEC - if you pay $600+ per year. 8. Depreciation Deduct the cost of big-ticket items (e.g., machinery, vehicles, equipment) over their useful life. Or use Section 179 Or Bonus Depreciation to deduct more upfront. 9. Business Insurance General liability, professional liability, workers' comp, E&O, property insurance, etc. 10. Marketing & Advertising Website, business cards, online ads, social media, sponsorships, print ads, etc. 11. Travel Expenses Airfare, hotels, car rentals, meals (usually 50% deductible), and incidentals while traveling for business. 12. Meals 50% of business meals with clients or employees. Must be directly related to business and not lavish. 13. Education & Training Courses, certifications, seminars, and training that maintain or improve your business skills. 14. Professional Fees CPA, attorney, consultant, bookkeeper, and other professional services directly related to your business. 15. Bank Fees & Interest Business loan interest, credit card interest (business only), bank fees, and merchant processing fees. 16. Software & Subscriptions Business-related software (QuickBooks, Adobe, Microsoft 365), cloud services, apps, and trade publications. 17. Bad Debts Only for accrual-based businesses: unpaid invoices that were included in income. 18. Employee Benefits Health insurance, retirement plans, HSA contributions, dependent care assistance, etc.