Common Tax-Deductible Expenses Small Business Owners Often Overlook
For small business owners, every tax deduction counts. While most are familiar with major deductions like office supplies and equipment, there are several lesser-known expenses that often go unnoticed — potentially costing business owners significant tax savings. Here’s a professional guide to tax-deductible expenses small businesses frequently forget to claim, along with specific examples and tracking tips.
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Car Registration Fees: If your vehicle is used for business purposes, a portion of your car registration fee can be deducted. Be sure to track the business-use percentage and apply it accordingly.
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Cell Phone Expenses: Many business owners use their personal cell phones for work. The percentage of your monthly cell phone bill related to business use can be deducted. For example, if 70% of your calls and data usage are business-related, you can deduct 70% of your cell phone costs.
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Internet Expenses: Similar to cell phone use, a portion of your home or office internet expenses that relate to business use is deductible. Keep records of internet bills and track the estimated percentage used for business.
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Professional Development: Courses, webinars, seminars, and certifications related to your business are deductible. If you attend an online training course or purchase industry-related books, those expenses can be written off.
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Software Subscriptions: Any cloud-based software or app used for your business — such as QuickBooks, Adobe Creative Cloud, or project management tools — is deductible.
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Bank Fees and Payment Processing Fees: Fees associated with your business bank account or platforms like PayPal and Square can be deducted as business expenses.
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Business Insurance: Premiums for general liability, professional liability, or cyber liability insurance are fully deductible.
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Website Hosting and Domain Fees: Your business website expenses, including hosting, domain registration, and website maintenance services, are deductible.
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Office Supplies and Equipment Maintenance: Even minor expenses such as printer ink, paper, and routine office equipment servicing qualify as deductions.
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Business Meals: 50% of qualifying business meal expenses, such as client meetings or travel-related meals, can be deducted. Make sure to document who you met with and the purpose of the meeting.
Conclusion
Small business owners often leave money on the table by forgetting about common but easily overlooked deductions. By staying proactive and keeping detailed records of expenses like car registration, cellphone and internet usage, software subscriptions, and more, you can reduce your tax liability and maximize your business’s financial health.For additional guidance, you can refer to the IRS’s Deducting Business Expenses guide or consult with a professional bookkeeper or tax advisor to ensure you’re taking advantage of every allowable deduction.