21 Tax Write-Offs for Small Business Owners

As a small business owner, understanding which expenses you can write off on your taxes is essential to maximizing your deductions and reducing your overall tax burden. From office supplies to health insurance premiums, there are many opportunities to save money come tax season.

Here’s a comprehensive list of 21 tax write-offs that small business owners should know about:

#1. Office Supplies

Any basic supplies needed to run your business, such as paper, pens, postage, and printer ink, can be written off as business expenses. Make sure to keep receipts and detailed records of your purchases throughout the year.

#2. Home Office Deduction

If you use part of your home exclusively for your business, you can claim a home office deduction. This includes a portion of your rent or mortgage, utilities, and maintenance costs, based on the percentage of your home’s square footage used for business purposes.

#3. Health Insurance Premiums

Small business owners who pay for their own health insurance may be eligible to deduct their premiums, as well as premiums for their spouse and dependents. This can be a significant deduction, especially for those who are self-employed. Learn more about how small business owners can write off health insurance.

#4. Marketing and Advertising

Expenses related to promoting your business, such as social media ads, website development, graphic design, and printed flyers, are all tax-deductible. This write-off covers the costs of marketing strategies that help bring in more customers.

#5. Internet and Phone Bills

If you use the internet or phone for business purposes, you can deduct a portion of your monthly bills. If you work from home, make sure to calculate what percentage of your internet usage is for business to determine your deduction.

#6. Business Meals

Business meals with clients, partners, or employees can be deducted at 50% of the cost, as long as the meal has a legitimate business purpose. Be sure to keep a record of who attended the meal and what was discussed.

#7. Travel Expenses

Travel expenses, including airfare, hotel stays, car rentals, and meals while on business trips, can be written off as long as the primary purpose of the trip is business-related. Remember, you can’t deduct expenses for personal vacations, but if part of a trip is business, you may still be able to write off that portion.

#8. Vehicle Expenses

If you use your car for business, you can either deduct the actual expenses (gas, maintenance, insurance) or use the standard mileage rate set by the IRS. Make sure to track your mileage and keep detailed records of business-related travel to take advantage of this deduction.

#9. Professional Services

Fees paid to professionals, such as accountants, lawyers, consultants, and IT experts, are deductible business expenses. This also applies to services like bookkeeping, tax preparation, and even business coaching.

#10. Education and Training

Courses, workshops, and seminars that help you improve your skills or knowledge in your business field can be deducted. This includes online courses and certifications, as long as they are relevant to your business activities.

#11. Software Subscriptions

The cost of software subscriptions used to run your business, such as accounting software, project management tools, or marketing automation services, can be written off. This also includes cloud storage services like Google Drive or Dropbox.

#12. Rent or Lease Payments

If you lease office space, warehouse space, or even equipment, the rent or lease payments are deductible. Make sure to have a clear agreement and documentation to support your claims.

#13. Employee Salaries and Benefits

The wages you pay your employees, as well as any benefits such as health insurance, retirement contributions, and bonuses, are tax-deductible. Payroll taxes paid on behalf of your employees are also deductible.

#14. Utilities

Utilities such as electricity, water, gas, and even trash removal services for your business premises are deductible. If you work from home, you can include a portion of these utilities in your home office deduction.

#15. Insurance Premiums

Business-related insurance premiums, including liability, property, and even cybersecurity insurance, are deductible. This ensures that you’re covered while also allowing you to save on taxes.

#16. Office Furniture

Furniture such as desks, chairs, filing cabinets, and shelves are considered capital expenses and can be depreciated over time. Alternatively, you might be able to take a Section 179 deduction to write off the entire cost in the year you purchase them.

#17. Merchant Fees

If you accept credit card payments, the processing fees charged by your payment provider are deductible. This can also apply to fees from online marketplaces like PayPal or Square.

#18. Bank Fees and Interest

Bank fees, such as charges for maintaining a business account or fees for wire transfers, can be written off. Additionally, interest paid on business loans or business credit cards is also tax-deductible.

#19. Retirement Plan Contributions

If you contribute to a retirement plan as a small business owner, such as a SEP IRA, SIMPLE IRA, or Solo 401(k), you may be eligible to deduct those contributions. This can help you save for your future while reducing your taxable income.

#20. Inventory Costs

The cost of goods sold, including the purchase price of inventory, shipping, and other related expenses, is deductible. Keep accurate records of your inventory purchases and any associated costs.

#21. Contract Labor

If you hire freelancers or contractors for business tasks, such as graphic design, copywriting, or web development, the payments you make to them are tax-deductible. Be sure to issue 1099 forms to any contractors who earn over $600 in a year.

What to Know About Tax Write-Offs As a Small Business Owner

Understanding and taking advantage of these tax write-offs can make a significant difference in your small business’s bottom line. As a small business owner, every deduction counts, and being aware of what you can legally write off helps you save more at tax time.

If you’re unsure about which deductions apply to your business or need help navigating your taxes, consider reaching out to a tax professional who can guide you through the process.

Ready to let ModVentures help you maximize your tax savings and ensure compliance this tax season? Reach out to the team today!