My Tax Courses Online
My Tax Courses Online
Blog Article
Top 5 Tax Deductions Every Small Business Owner Should Know (And How to Claim Them)
As a small business owner, maximizing tax deductions is one of the easiest ways to reduce your taxable income and keep more money in your pocket. However, many entrepreneurs miss out on valuable deductions simply because they don’t know about them or how to claim them correctly. In this guide, we’ll break down the top five tax deductions you should be taking advantage of—from home office expenses to vehicle use—and explain how to document them properly to avoid IRS scrutiny.
Home Office Deduction: Save Money for Working from Home
If you use part of your home exclusively for business, you may qualify for the home office deduction. This can include a percentage of your rent, mortgage interest, utilities, and even internet costs. The IRS offers two methods: the simplified method (a flat rate per square foot) or the actual expense method (tracking exact costs). Keep records like bills and a floor plan to support your claim. Just remember—the space must be used regularly and exclusively for business to qualify.
Vehicle Expenses: Write Off Business-Related Travel
If you use your car for business—whether for deliveries, client meetings, or errands—you can deduct those costs. There are two ways to calculate this: the standard mileage rate (IRS-set rate per mile) or actual expenses (gas, repairs, insurance). Log every trip with dates, mileage, and business purpose to stay audit-proof. Pro tip: Commuting from home to your main workplace doesn’t count, but driving between job sites does!
Bonus Deductions: Retirement Contributions, Supplies, and More
Don’t overlook smaller deductions that add up, like office supplies, software subscriptions, and even retirement plan contributions (e.g., SEP IRA or Solo 401(k)). Health insurance premiums for self-employed individuals are also deductible. Always keep receipts and invoices, and consider using accounting software to track expenses year-round. By leveraging these deductions, you’ll lower your tax bill and reinvest more into growing your business.
Want to learn more? Enroll in our IRS-approved tax courses at MyTaxCoursesOnline.com to master deductions, credits, and tax strategies—all at your own pace! Report this page