101 Small Business Tax Deductions: The Ultimate Checklist

90% of small business owners overpay on taxes because they miss tax deductions.

Missing small business tax deductions and write-offs can cost you thousands of dollars in taxes.

Section 162 of the tax code allows small business owners to deduct all “ordinary and necessary” expenses from their taxable income. 

Therefore, any expense you incur that meets this simple criteria is tax deductible.

Still, many business owners are unaware of the many tax deductions they could be taking advantage of.

This Small Business Tax Deductions Checklist can help you get started. It will also help you stay organized and on track when filing your tax returns. 

What Expenses Can Small Business Owners Claim As Deductions?

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We all know that running a business can be very expensive, not to mention the constant pressure to manage costs effectively while trying to grow and stay competitive in the market.

Fortunately, you can write-off these tax-deductible business expenses to reduce your taxes. 

1. Accounting Fees

Considering the complexity of tax laws and the importance of accurate financial records, many small business owners choose to hire professional accountants. 

The money you spend on professional accounting services can be deducted from your taxable income.

As always, remember to document these expenses carefully to maximize your deductions and keep your business financially healthy.

2.  Advertising & Marketing

Marketing your business is crucial to finding customers and establishing yourself.

And sometimes it can cost a lot.

Fortunately, you can reduce your taxes with most of the money you spend on advertising and marketing your business.

3. Amortization

Amortization helps you spread out the cost of big expenses over time. 

You can use amortization for different costs like starting your business, intangible assets (like goodwill, patents, and copyrights), and previous unused tax deductions.

This way, you don’t have to pay for everything all at once.

4. Bad Debts

When customers owe you money and do not pay you, it is a considered a “bad debt expense”.

The IRS allows you to write-off this expense depending on your accounting method.

There are two accounting methods you can choose from: cash or accrual.

With cash accounting, income is recorded when you receive cash. Therefore, if a customer does not pay you, no income is recorded.

With accrual accounting, income is recorded when you deliver goods or services. Therefore, if a customer does not pay you, you can claim it as a bad debt expense.

5. Bank Fees

Running a business means you’ll need a bank account for your operations.

Good news: the costs related to maintaining this account are considered deductible business expenses. 

This includes any fees you might pay for the account’s upkeep, like monthly service fees, overdraft fees, or wire transfer fees.

6. Barter costs

Many small businesses offer their goods or services to other small businesses as a barter exchange to protect their cash flow. 

Businesses that do this can deduct the costs incurred to perform the service or make the product. 

7. Board Meeting Expenses

When you gather your board for a meeting, the expenses can add up. 

Whether it’s renting a space, providing snacks, or serving meals, these costs are part of doing business. 

Luckily, they’re also deductible, meaning you can subtract them from your taxable income.

8. Bookkeeping Fees

Keeping your finances in order is crucial for any business, and that often means hiring a bookkeeper. 

Bookkeeping involves recording and organizing financial data, invoicing, managing bills, processing payroll, and balancing transactions.

The good news is that the fees you pay for bookkeeping services are considered deductible business expenses.

9. Business Association Membership Dues

Being part of professional groups or associations can be vital for your business’s growth and credibility. 

These memberships should be on your small business tax deduction checklist because they are recognized as important business expenses. 

10. Business Related Conferences, Conventions, and Trade Shows

Attending industry events like trade shows, conferences, and conventions is key to networking and staying up to date. 

Not only do these activities expand your knowledge and connections, but the expenses involved, including travel costs, are also tax-deductible. 

This makes participating in such events not just good for business development but also beneficial for your taxes.

11. Business Travel

Expenses you incur during your business travels, including lodging, fares, laundry, meals, and other necessary expenses, are all tax deductible.

You can deduct a portion of your costs for business travel. Typical use cases for business may include travel to conferences, seminars, board meetings, or any other “ordinary and necessary” business purpose.

To make this deduction work for you, keep detailed records of the expenses you spend on the trip. 

12. Business Use of Your Home

If you have a specific area in your home set aside just for business activities and regularly use it for that purpose, you can write off a portion of your taxable income. 

This part of your home, whether it’s a full office or just a corner in your living room, can lead to tax savings. 

Both renters and homeowners can deduct expenses related to this business use, such as a portion of rent or mortgage, utilities, and internet costs, making it a valuable item on your tax deductions list.

13.  Car Expenses

You can deduct a portion of your vehicle expenses from your taxes, if you use a portion of it for your business.

Using the Actual Expenses Method or the Standard Mileage Method allows you to write off each business mile or a portion of specific costs (maintenance, insurance, registration fees).

14. Charitable Contributions Made for Business Purposes

If you’re a business owner who’s contributed to charitable causes, then you can use those donations to decrease your tax bill. 

A corporation may deduct charitable contributions by up to 25 percent of its taxable income. 

Contributions that exceed that amount can carry over to the next tax year. These limits are greater for personal charity contributions. 

15. Traveling to Perform Charitable Services

If you travel to help out a charity, your travel expenses can be written off. 

This includes things like gas for your car or even plane tickets if you’re going far to volunteer your time and skills for a good cause.

16. Childcare

Childcare costs are not usually claimed as a direct business expense. 

Instead, you may be able to write-off a portion of your childcare costs under a “fringe benefit plan”.

This is an employer-sponsored benefit that provides dependent care assistance for your employees.

If you are self-employed, then you may benefit from this plan and may write-off the expenses you incur to administer it.

17. Cleaning/Janitorial Services

Keeping your business space clean is not just good for appearances; it’s also deductible. 

If you hire someone to handle the cleaning, you can reduce your taxable income with this expense. 

This may also include cleaning services for your home-office.

18. Collection Expenses

If you spent money trying to collect unpaid business debts, regardless of whether you were able to collect them fully, partially, or failed, these expenses are deductible. 

Examples of collection expenses may include fees to hire collection agencies, attorneys, or other legal services to help you collect payments from debtors.

19. Commissions to Third Parties

Paying commissions to others, like salespeople who help drive your business, is a common practice. 

You can deduct these payments as a legitimate business expense.

20. Computers and Tech Supplies

If you buy gadgets like laptops, printers, or tablets for your business, you can deduct their cost from your taxable income, regardless of whether they are brand new or used. 

21. Consulting Fees

Whenever you pay for professional advice to better your business, those fees count as a business expense. 

So, whether it’s for marketing, legal, or financial advice, you can deduct these costs.

22. Contractors & Freelancers

If you hire freelancers or contractors for your business tasks, you can deduct what you pay them from your taxes.

Also, if you pay any freelancer or contractor more than $600 in a year, you need to send them a special tax form called Form 1099-NEC. 

In order to file this form, you must have a completed W-9 form from any contractor you hire. As a general practice, you should request the W-9 form from any contractor you hire.

23. Co-working Space

Using a co-working space comes with its perks, including tax deductions. 

You can deduct expenses related to renting a desk, using office equipment, or even a mailbox within these shared spaces.

24. Credit Card Fees

Similar to bank fees, any fees you pay on a business credit card are deductible. 

This can include annual fees, late fees, and interest charges, helping to lessen the cost of financing your business operations.

25. Depreciation

When you own assets for your business you can depreciate them to reduce your taxes.

Depreciation is when you deduct the cost of these items over time, acknowledging that they lose value as they age. 

Examples of assets that depreciate include:

• Your office building, if you own it
• Computers and tech gadgets
• Machines
• Cars used for business
• Desks, chairs, furniture, and other office gear

When you claim depreciation, you’re getting a tax break because things like equipment lose value as they get older. 

If you are planning to take the depreciation tax deduction, consider talking to a tax CPA.

They can guide you on the best methods to depreciate your assets to save the most in taxes.

26. Eating Out While Traveling for Business

Your meals while traveling for business are tax-deductible.

However, the cost must be reasonable.

Flying to Omaha to eat a $6,000 burger might not work with the IRS; however, a casual breakfast in the hotel restaurant before a client meeting in Omaha probably will.

27. Your Education 

Going to workshops, purchasing books, or learning about new trends in your field may help you expand your business.

As long as your educational expenses relate to your business, they may be tax-deductible. 

The expense must maintain or enhance the skills necessary to operate your trade or business.

28. Education for Your Employees

Not only can you write-off your education expenses, but you can also write-off similar expenses for your employees.

Any expense incurred to maintain or enhance the skills of your employees are also tax-deductible, making it a valuable addition to your small business tax deductions checklist.

29. Employee Awards

Do you reward your employees’ for their achievements and rewards?

Expenses incurred for achievement awards are also tax-deductible. This include tangible rewards like trophies and plaques.

However, the deduction is subject to certain limits. 

30. Employee Benefits

Generally, any employee benefit program is tax-deductible to you as the employer.

Offering benefits like vacation or sick leave are all deductible expenses. 

And by including these in your small business tax deductions checklist you’re not overlooking significant savings.

31. Employee Discounts

If you offer discounts to your employees, those costs are also deductible. 

It’s a great way to reward your team and reduce your taxable income.

32. Employee Jury Pay

When employees serve on jury duty and you continue to pay them, you can deduct these payments. 

It’s an expense that supports your team and your business’s financial health.

33. Employee Loans or Advances You Do Not Expect to Be Paid Back

If you advance or lend money to employees and they repay you, that’s not deductible. 

However, those loans and advances become deductible to you if they are not paid back.

34. Employee Reimbursement

Do you reimburse your employees for out-of-pocket expenses?

If so, you may deduct these expenses under an accountable plan.

An accountable plan requires that the costs be incurred while the employee performs services for you and that there be a business condition for the expense. 

35. Employee Wages

Paying your team—salaries, commissions, bonuses, or vacation pay—is good for them and tax deductible for you. 

Overtime and vacation pay and any reasonable cash value of compensation other than cash, are also deductible.

Include these in your small business tax deductions checklist to ensure you’re not overpaying on taxes.

36. Equipment Purchases

Whenever buying new or used tools and machinery, every purchase that’s necessary for your business operations is deductible. 

If the equipment is expected to last for year, you must depreciate the asset to write-off a portion of it each year over its useful life.

37. Equipment Rent

Is it easier for you rent equipment instead of buying it?

Choosing to rent equipment offers flexibility and savings, as rental fees are tax-deductible. This option can help manage cash flow while ensuring you have the tools you need.

38. Equipment Repairs

Does your equipment need to be repaired?

Fixing equipment is part of business maintenance, and these repair costs are deductible. This provides financial relief while keeping your operations running smoothly.

39. Equipment Maintenance

Regular maintenance prevents bigger issues and the costs are deductible. This encourages businesses to keep equipment in top shape while managing expenses wisely.

40. Film, Television, and Live Theatrical Production Costs

Under Code Section 181, creative projects in film, TV, and theater can immediately expense production costs until 2025. This tax relief supports the arts sector and encourages creative endeavors.

41. Franchise Fees

Small business owners who operate a franchise may write-off all fees to the franchisor.

42. Freight or Shipping Costs

Shipping products or receiving supplies incurs costs, but these are deductible and a normal part of business.

43. Furniture or Fixtures

Investing in furniture or fixtures for your business space enhances the work environment and customer experience. 

These purchases are deductible, supporting your operational and financial planning.

44. Gifts for Customers or Employees

You can deduct the cost of gifts for employees and customers, up to $25 each. This allows small business owners to show appreciation without a heavy tax burden.

45. Guard Dogs

Expenses for certified guard dogs, including food, vet care, and training, are deductible. 

Typically, the dog should be from a breed known for guarding, like Rottweilers or German Shepherds, to qualify.

46. On-Site Gym for Employees

Offering an on-site gym as a perk is good for employee health and a deductible business expense. 

This benefit enhances workplace wellness and can be included in your deductions.

47. Health Insurance for Yourself, Your Spouse, and Your Dependents

If you’re self-employed, you can deduct 100% of your health insurance premiums, a significant saving that supports personal and family health.

48. Home Rental

Using the Augusta rule, you can rent your home to your business for up to 14 days a year without reporting the rent as income, allowing for a tax deduction opportunity.

49. Improvements to a Business Asset

Making improvements to business assets can be costly.

Fortunately, you can write-off a portion of improvements and renovations made to business assets.

50. Business Insurance Premiums

Premiums for various business insurances, such as liability, worker’s comp, malpractice, and other types of insurance are deductible. This helps manage the cost of protecting your business against potential risks.

51. Insurance Premiums on Business Property

Premiums for business property insurance are deductible, ensuring your assets are protected without straining your finances. 

Incorporating this into your small business tax deductions checklist can help you increase savings.

52. Interest on Loans

The interest paid on business loans is a deductible expense, lightening the load of financing your business’s growth and operations.

53. Internet Costs

Internet expenses are crucial for business operations and are fully deductible, ensuring you stay connected affordably.

54. Inventory

When you stock-up on goods for inventory, the cost is not deductible at the point of purchase.

However, when you sell the goods to customers, you may write-off the “cost of goods sold” which include the cost of your inventory.

55. Investment Advice and Fees

Fees for professional investment advice regarding business assets are deductible, making strategic financial planning more accessible.

56. Kids

Employing your children, provided they are under 18 years old, comes with tax advantages. 

If you pay them under the standard deduction limit, it’s tax-free for them and deductible for you—a great strategy to keep in your small business tax deductions checklist.

57. Legal Fees

Legal fees should also be on your small business tax deduction checklist. If you pay a lawyer to help you set up the business, resolve a tax or legal issue, their costs are deductible.

58. License Fees

The costs of necessary business licenses and permits, including industry-specific ones, are deductible expenses, facilitating smooth business operations.

59. Lodging While Traveling for Business

Accommodation costs during business travel, including hotels or Airbnb stays, are deductible, making business trips more budget-friendly.

This may also include fees to stay at a friend’s or relative’s place if the travel is for business.

60. Management Fees

Fees paid for management services are deductible, recognizing the importance of professional oversight in business efficiency and growth.

61. Materials

When you make products for your business, the cost of materials is deductible under the cost of goods sold deduction.

This includes anything from raw materials to small parts, making it a bit easier on your budget when it comes to manufacturing or creating what you sell. 

It’s an essential part of managing your production costs and a vital item on your small business tax deductions checklist.

62. Maintenance

Maintenance expenses for the upkeep of your business assets, tools, or property are tax-deductible.

This ranges from the upkeep of your physical space, like lawn care or building maintenance, to maintaining office equipment such as copiers and computers. 

63. Meal Expenses

You can deduct 50% of business meal costs with business contacts.

To qualify, the meals must be for business purposes only. 

To make sure you can deduct these meals, remember to note down:

• How much you spent
• When and where it happened
• Who was there and their connection to your business
• The business topic discussed

There’s no doubt that this is one of the most important parts of your small business tax deductions checklist, so ensure you keep all receipts.

64. Medical Expenses

If your total medical expenses exceed 7.5% of your adjusted gross income, you can deduct these from your personal taxes as an itemized deduction. 

This can include a wide range of medical costs, from doctor visits to prescriptions, offering some relief during tax time for significant out-of-pocket health expenses.

This does not include reimbursed expenses or expenses covered from health insurance.

65. Mileage

Each mile you drive for business purposes can be deducted. 

The standard mileage method allows self-employed individuals to write-off a predetermined amount each year, based on the total business miles driven.

To qualify, you must use your car for business, charity, medical, or moving purposes.

66. Mortgage Interest on Business Property

If you own property for your business, you can write-off 100% of your mortgage interest.

This helps reduce the cost of financing your business property.

67. Moving Expenses for the Business

If your business moves to a new location, the costs involved in the move are deductible. 

This can include packing, transport, and setup at the new site, making relocation a bit easier financially.

68. Magazine Subscriptions for Your Business

Subscriptions to magazines that keep your waiting area interesting or inform you about your industry are tax deductible. 

It’s a simple way to keep up-to-date and provide reading material for clients without impacting your budget too much.

69. Office Supplies and Expenses

Any expense you incur to purchase office supplies or operate your office is tax deductible.

Even small items like paperclips and staplers are deductible. 

While each item might not cost much, over time, the total can significantly reduce your taxes.

70. Office Entertainment

The costs of items for office entertainment, like speakers, pool tables, or games, are also deductible. 

These investments may improve workplace morale and are recognized as beneficial for the business environment.

 71. Office Rent

If you rent a space for your office, your rental costs are tax deductible.

This deduction is crucial for businesses that lease their workspace, helping to lower the overall cost of maintaining an office.

72. Organizational Costs

If you’re starting a new business, you have to deal with those initial setup fees. 

Whether it’s forming an LLC, partnership, or corporation, these costs can be deducted right away or spread out over 15 years. 

It’s a helpful boost as you get your business off the ground.

73. Payroll Processing Costs

Handling payroll comes with its own set of fees, but these are deductible. 

Knowing you can recover some of these costs during tax time makes managing employee payments a little easier.

74. Payroll Taxes for Employees

The taxes you pay on behalf of your employees, like unemployment taxes and your share of Social Security and Medicare, are deductible. 

This eases the financial responsibility of providing for your team.

75. Parking and Toll Fees

If you pay for parking and tolls while on business, these expenses are deductible, which can add up to considerable savings especially if you’re on the road often for work.

76. Penalties and Fines Paid for Late Performance or Nonperformance of Contracts

While no business likes to face them, penalties and fines for contract issues are deductible. 

It’s a small consolation that helps mitigate the impact of these unforeseen expenses.

77. Pension Plans

Pension plans are used by small business owners to supersize contributions to their own retirement.

These contributions may be tax deductible for you and the business.

Additionally, offering pension plans to your employees is also tax-deductible for you. 

This employee benefit is an essential part of your small business tax deductions checklist, enhancing your team’s security and your business’s tax savings.

78. Permits and Fees

Many businesses require various permits to operate legally. The cost of obtaining these permits, essential for industry compliance, is fully deductible, making it a crucial item on your small business deductions list.

79. Print Materials

Marketing tools such as print materials like business cards, flyers, and brochures are deductible expenses.

They play a key role in promoting your business, and their costs can be minimized through tax deductions.

80. Profit Sharing

If you have a profit-sharing plan, contributions are deductible up to 25 percent of the compensation paid to all participants during the year. 

This incentive not only motivates your team but also offers tax advantages for your business, adding value to your small business tax deductions checklist.

81. Contest Prizes

Rewards for business contests, whether for employees or customers, are deductible. 

It’s a creative way to engage your audience and support your marketing efforts, all while benefiting from tax deductions.

82. QBI Deduction

Many small businesses are eligible for the Qualified Business Income deduction of up to 20 percent of your business income. For many companies, this represents a tax savings of several thousand dollars.

83. Real Estate-Related Expenses

If you own rental property, expenses related to repairs, travel, insurance, and depreciation are deductible. 

This broad category helps property owners manage the costs associated with maintaining and managing real estate.

84. Rebates on Sales

You can take a tax deduction when you accept returns or discount your products as part of a promotion or as a concession to an unhappy customer. 

85. Research and Development Expenses

Any expense you incur to research or develop business processes, systems, products, or services are tax-deductible.

Additionally, such expenses may also qualify for the research and development tax credit.

Research and development (R&D) expenses can be significant and are deductible if carefully tracked.

86. Retirement Plans for the Employer

Setting aside money in a SIMPLE IRA, SEP IRA, Solo 401(k), or Small Business 401K may be tax-deductible depending on your account structure.

These plans allow you to invest in your retirement while either 1) deferring your taxes until retirement (traditional account) or 2) withdrawing income tax-free during retirement (roth account).

87. Retirement Service Fees

Any fees you pay for managing your retirement plans or other business services can be deducted. 

This includes costs associated with financial management or advisory services, helping you save money while maintaining these essential services.

88. Signage

Investing in signage to advertise your business location or services is deductible. 

Effective signage can attract more customers, and the cost of creating and installing these signs can be offset by tax savings.

89. Software and Online Services

The costs for software and online services crucial to running your business are deductible. 

Whether it’s bookkeeping software, trade-specific applications, or even streaming services for the office, these expenses help keep your business modern and efficient.

90. Startup Expenses

In most cases, if not all, your start-up costs should be eligible for deduction as business expenses. 

The IRS will allow you to deduct 100% of your startup expenses, up to $5,000.

You can cut down on your taxes by deducting costs like setting up your company, feasibility planning, or getting it registered. 

91. Storage Rental Fees

If you rent storage space for inventory, supplies, or business records, this expense is deductible. 

This is important for small businesses that need extra space, helping to manage costs effectively.

92. Taxes

You can deduct many kinds of taxes linked to your business, such as state income tax, payroll tax, and even sales tax. 

This helps lower your taxable income and saves you money making understanding which taxes you can deduct crucial for your small business tax deductions checklist.

93. Telephone Costs

The costs for your business phone line or internet-based phone service can be deducted. 

This makes staying connected with customers and managing your business communications more cost-effective.

94. Theft and Loss

If your business suffers from theft or damage due to a major disaster recognized by the federal government, those losses are deductible. 

It’s a way to recover some of the financial impacts of unexpected events.

95. Tips

If you leave a tip during a business meal or on a business trip, these amounts are deductible. 

96. Tools

Tools necessary for your work, no matter your industry, are deductible. This covers everything from hammers and saws in construction to graphic design software in marketing, helping you save on business expenses.

97. Employee Uniforms

The cost of uniforms for your employees, if required for the job, is deductible. It’s a way to ensure your team looks professional without adding to your financial burden.

98. Utilities

Water, electricity, and other utilities are deductible business expenses. If you work from home, you can deduct a portion of your home’s utility bills based on the space your home office uses.

99. Waste Removal

Whether you pay a garbage or junk removal company, you can deduct waste removal expenses for your business. 

100. Website Design

Investing in your business’s online presence through website design is not only beneficial for attracting customers but also deductible. 

Fees for professional web design and development can significantly reduce your taxable income.

101. Workers’ Compensation Insurance

The premiums you pay for workers’ compensation insurance are deductible. This insurance is essential for protecting your employees in case of workplace injuries, and being able to deduct the cost helps manage the financial aspect of providing this protection. 

It’s an important part of your small business tax deductions checklist, ensuring you can support your team’s safety without undue financial strain.

Make the Most of Your Savings with Our Small Business Tax Deductions Checklist

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As a small business owner, you work hard to build your company. 

And the idea of paying more taxes than you need to just doesn’t sit right.

So, keeping all these factors in mind, it’s time to stop overlooking potential savings.

This small business tax deduction checklist is a starting point. 

My CPA Coach works directly with small business owners to develop customized tax planning strategies. 

Together, let’s make sure your hard work pays off by fully leveraging your small business tax deductions. Contact My CPA Coach today.