Top Business Tax Deductions
September 9, 2025
💼 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.
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