Small business tax deductions: 10 write-offs you don’t want to miss

Our straightforward checklist helps small business owners identify common tax deductions, understand what counts as a legitimate write-off, and feel more confident heading into tax season.

The new year is a time for resolutions, ambitious goals and fresh starts. But it’s also tax season, and for small business owners, there is a resolution worth keeping: don’t pay more in taxes than you owe.

The wisest move you can make for your 2025 taxes is to work with a trusted CPA. But walking into those meetings with a solid grasp of common tax deductions ensures you don’t miss opportunities or overpay.

Use this small business tax deduction checklist to stay organized this tax season.

Home office

The home office deduction may apply if you operate your small business out of your home, or in a separate structure on your property, in a space designated exclusively for business.

There are two methods for determining the amount you can deduct for your home office.

• Regular method: Split the home's operating expenses between personal and business use. Deduct business-only expenses entirely, and allocate indirect costs, like utilities, using the percentage of the home used for business.
• Simplified method: Multiply the home office square footage by a standard $5 per square foot. For example, if your home office is 200 square feet, 200 multiplied by $5 is $1,000.

Don’t miss it! If you frequently meet with clients outside of your office, but still manage the business from your home office, you may still qualify for the home office deduction.

Records to keep for the home office deduction

• Utility bills
• Mortgage or rent statements or receipts
• Security alarm bills
• Property tax bills
• Home insurance bills
• Home repair bills
• Floor plan

When you can’t use the home office deduction

If the space is not used exclusively for business (e.g., the kitchen table or guest room).

Office supplies and expenses

Supplies, even the smallest ones, and office expenses used for your small business are often tax-deductible. These include:

• Paper and postage
• Business-use software or app subscriptions
• Computer accessories
• Office furniture
• Small business insurance (general liability, professional liability, workers’ comp, etc.)
• Phone plans

Don’t miss it! Even digital tools like Lumin PDF, Canva, Zoom, and ChatGPT are deductible if used for business purposes.

Records to keep to deduct supplies and office expenses

• Invoices or receipts of supply purchases
• Subscription confirmations or receipts
• Credit card statements showing specific business purchases
• Small business insurance statements
• Phone plan statements

When you can’t deduct supplies and expenses

When the item is used for personal or household purposes (e.g., buying coffee you drink at home, even if you happen to drink it while working).

Vehicle ownership and operation costs

Vehicles used for business purposes, and the expenses associated with them, are often tax-deductible. If a car is used solely for business, expenses may be fully deductible. If shared with personal use, track and deduct only the business portion. Deductible costs include:

• Vehicle purchases
• Business mileage
• Fuel
• Maintenance costs
• Auto insurance
• Registration fees
• Depreciation

Don’t miss it! Tolls and parking fees related to business travel are deductible.

Records to keep to deduct vehicle ownership and operation costs

• Mileage logs
• Fuel receipts
• Maintenance and repair receipts
• Loan or lease documents
• Auto insurance policy
• Proof of business use

When you can’t deduct vehicle ownership and operation costs

Personal use of vehicles is never deductible. Commuting costs are not deductible.

Business rent and lease payments

If you rent or lease space or vehicles used solely for your business, those costs are tax-deductible.

Don’t miss it! Are you renting storage space or co-working space to manage your business? Those expenses may be eligible for a tax deduction.

Records to keep to deduct business rent and lease payments

• Lease or rental agreements
• Invoices or receipts showing lease or rental payments
• Proof of business use

When you can’t deduct business rent and lease payments

If you own a separate structure and pay rent to yourself, those expenses are generally not deductible. An exception to this would be if you have structured the personal property as an LLC; however, be sure to work with an attorney to ensure it is structured correctly.

Business meals and entertainment

If dining out or other entertainment costs are part of your business, they may be tax-deductible. Here are some examples of meal and entertainment expenses to track for tax time:

• Meals with clients or prospective clients
• Meals with employees (if there is a business purpose)
• Meals during business travel, like client visits or conferences
• Company parties
• Company retreats
• Team-building events

Don’t miss it! If you host a restaurant event or a catered meal for business purposes, it may be deductible up to 50%. Holiday parties are often 100% deductible.

Records to keep to deduct business meals and entertainment

• Itemized receipts
• Attendees names and relationships
• Business purpose statements
• Travel itineraries for business trips

When you can’t deduct business meals and entertainment

Entertainment expenses, such as concerts and sporting events, cannot be deducted. You also cannot deduct any part of a personal meal, or meals without a business purpose.

Employee-related expenses

If you have even one paid employee for your small business, you may be able to deduct the following expenses:

• Wages or salaries
• Bonuses
• Business contributions to employee retirement plans
• Business-paid health, dental and vision insurance
• Business-paid payroll taxes
• Education assistance or training provided to employees
• Workers’ compensation insurance

Don’t miss it! Don’t forget that employer contributions to employee retirement plans and health insurance plans are entirely deductible.

Records to keep to deduct employee-related expenses

• Payroll logs
• Employment agreements
• Time sheets
• Employee tax forms (W2, W3)
• Payroll tax filings
• Employee benefit documents
• Proof of retirement and health insurance contributions

When you can’t deduct employee-related expenses

You cannot deduct payments to yourself (if you’re a sole proprietor), personal expenses run through payroll or unreasonable compensation.

Legal and professional services

Professional services are often small business tax deductions if the services are used solely for business purposes, including the following:

• CPAs
• Attorneys
• Payroll services
• Consultants

Don’t miss it! If you pay for tax preparation for your personal and business taxes, the cost associated with your business return is tax-deductible.

Records to keep to deduct legal and professional services

• Invoices and statements of services
• Receipts for payments made for services
• Proof of business purpose

When you can’t deduct professional services

You cannot deduct any professional services that:

• Do not have a specific business purpose
• Include legal fees or costs for illegal acts
• Include legal fees for acquiring a capital asset

Marketing and advertising

Marketing and advertising are often critical components of small business success, and most of the costs are tax-deductible. Things like:

• Website hosting and domain fees
• Business cards
• Promotional materials
• Ads
• Email marketing platforms (like Mailchimp)
• Business networking sites (like LinkedIn)

Don’t miss it! Costs for website hosting, domains and maintenance are commonly overlooked even though they’re fully deductible.

Records to keep to deduct marketing and advertising costs

• All invoices and receipts for marketing and advertising
• Contracts with marketing agencies or independent contractors

When you can’t deduct marketing and advertising costs

Marketing or advertising costs for personal purposes or political purposes are not deductible on your small business taxes.

Taxes and licenses

Most taxes and licenses directly associated with your business are deductible, including:

• State and local income taxes
• Payroll taxes
• Business license and permit fees
• Business property real estate taxes

Don’t miss it! Do you have industry certifications? Renewal of industry certifications is 100% tax-deductible.

Records to keep to deduct taxes and licenses

• Receipt of tax payments
• Copies of all licenses and permits
• Payroll tax returns
• Business property tax bills

When you can’t deduct taxes and licenses

You cannot deduct federal income tax, penalties, self-employment tax or sales tax on personal purchases.

Business interest

If you have business loans or credit lines, you may be able to deduct interest, including:

• Business credit card interest
• Business loan interest
• Business line of credit interest
• Business real estate mortgage interest

Don’t miss it! If you have a credit card you use for personal and business purposes, document the interest accrued on business spend separately and deduct it from your small business taxes.

Records to keep to deduct business interest

• Loan documents
• Credit card statements
• Bank statements
• Proof of business use

When you can’t deduct business interest

You cannot deduct interest tied to personal debt, overdue tax interest or interest that must be capitalized into a long-term asset.

Make this tax season work for your small business

By tracking expenses, understanding the available tax deductions for small business owners and working with a knowledgeable tax professional, you can eliminate overpayments this tax season and reinvest those savings back into your business, where it matters most.

To make this tax season a breeze, securely edit and manage all your tax documents in one place with Lumin PDF.