Running a small business is demanding, and tax season adds another layer of stress. But with proper planning, you can significantly reduce what you owe the IRS. Many business owners miss deductions simply because they don't know they qualify.
# Commonly Overlooked Deductions
## 1. Home Office Deduction
If you use a portion of your home regularly and exclusively for business, you may be able to deduct home office expenses. This includes a percentage of your mortgage interest or rent, utilities, and insurance.
## 2. Vehicle and Mileage Expenses
Business-related driving adds up fast. You can deduct either the actual costs of operating your vehicle for business or use the standard mileage rate. Keep a mileage log — it's worth it.
## 3. Self-Employed Health Insurance Premiums
If you pay for your own health insurance and are not eligible for employer-sponsored coverage through a spouse, you can deduct 100% of your premiums from your taxable income.
## 4. Retirement Plan Contributions
Contributions to a SEP-IRA, SIMPLE IRA, or Solo 401(k) reduce your taxable income dollar for dollar. This is one of the most powerful tax-saving tools available to the self-employed.
## 5. Professional Services & Education
Fees paid to accountants, attorneys, and consultants are deductible. So are education and training costs that maintain or improve your existing skills.
## 6. Start-Up Costs
If you launched your business recently, you may be able to deduct up to $5,000 in start-up costs in your first year of operation.
The bottom line: proactive planning throughout the year — not just at tax time — leads to the best outcomes. A CPA can help you identify and document these deductions properly so you never leave money on the table.
#tax deductions#small business#tax planning#self-employed