50+ Tax Deductions for Small Business Owners (2026 Guide)
Every dollar you deduct is a dollar that reduces your taxable income. For small business owners, knowing which expenses qualify as tax deductions can mean the difference between owing thousands and getting a refund. Yet many business owners leave money on the table simply because they don't know what they can deduct.
This comprehensive guide covers over 50 legitimate tax deductions available to small business owners, freelancers, and self-employed individuals. Whether you operate as a sole proprietor, LLC, or S-Corp, these deductions can significantly reduce your tax burden.
Home Office Deductions
If you use part of your home exclusively and regularly for business, you can deduct a portion of your housing costs.
1. Home Office Space
Deduct a percentage of rent/mortgage, utilities, insurance, and repairs based on the square footage used for business. The simplified method allows $5 per square foot (up to 300 sq ft).
2. Internet & Phone
Business percentage of your internet and phone bills. Track business vs. personal usage for accurate deductions.
3. Office Furniture
Desks, chairs, shelving, and other furniture used in your home office. Can be depreciated or expensed in full.
Vehicle & Travel Expenses
4. Vehicle Mileage
Standard mileage rate for business driving. Keep a mileage log with dates, destinations, and business purpose.
5. Actual Vehicle Expenses
Alternative to mileage: deduct actual costs (gas, insurance, repairs, depreciation) multiplied by business use percentage.
6. Parking & Tolls
Business-related parking fees and toll charges are deductible in addition to mileage.
7. Business Travel
Airfare, hotels, rental cars, and 50% of meals when traveling for business. Trip must be primarily business-related.
8. Local Transportation
Uber, Lyft, taxis, and public transit for business purposes (client meetings, site visits, etc.).
Equipment & Technology
9. Computers & Electronics
Laptops, desktops, tablets, monitors, and accessories used for business. Section 179 allows immediate expensing.
10. Software Subscriptions
Business software, cloud services, design tools, accounting programs, and productivity apps.
11. Equipment & Machinery
Industry-specific equipment, manufacturing machinery, and specialized tools. Depreciate or expense under Section 179.
12. Office Supplies
Paper, pens, printer ink, postage, packaging materials, and general office consumables.
Professional Services
13. Accounting & Bookkeeping
Fees paid to accountants, bookkeepers, and tax preparers for business-related services.
14. Legal Fees
Attorney fees for business matters: contracts, entity formation, intellectual property, dispute resolution.
15. Consulting Fees
Business consultants, coaches, and advisors who help with strategy, operations, or growth.
16. Contractors & Freelancers
Payments to independent contractors for services. Remember to issue 1099s for payments over $600.
Marketing & Advertising
17. Online Advertising
Google Ads, Facebook Ads, LinkedIn Ads, and other digital advertising platforms.
18. Website Expenses
Domain registration, web hosting, website design, and maintenance costs.
19. Print Marketing
Business cards, brochures, flyers, signage, and print advertisements.
20. Promotional Items
Branded merchandise, giveaways, and promotional products given to clients or prospects.
21. Email Marketing Tools
Email marketing platforms, CRM software, and marketing automation tools.
Insurance Premiums
22. Business Insurance
General liability, professional liability (E&O), and business property insurance.
23. Health Insurance
Self-employed individuals can deduct health insurance premiums for themselves, spouse, and dependents.
24. Workers' Compensation
Required workers' comp insurance premiums for employees.
25. Cyber Liability Insurance
Coverage for data breaches and cyber attacksâincreasingly important for all businesses.
Employee-Related Expenses
26. Salaries & Wages
Compensation paid to employees, including bonuses and commissions.
27. Payroll Taxes
Employer portion of Social Security, Medicare, and unemployment taxes.
28. Employee Benefits
Health insurance, retirement plan contributions, and other benefits you provide.
29. Training & Education
Job-related training, courses, and professional development for employees.
Financial Expenses
30. Business Loan Interest
Interest paid on business loans, lines of credit, and business credit cards.
31. Bank Fees
Monthly service charges, wire transfer fees, and merchant processing fees.
32. Payment Processing Fees
Credit card processing fees from Stripe, Square, PayPal, and similar services.
Education & Professional Development
33. Courses & Workshops
Business-related courses, certifications, and skill development programs.
34. Books & Subscriptions
Business books, industry publications, research databases, and professional journals.
35. Conferences & Events
Registration fees, travel, and accommodation for industry conferences and trade shows.
36. Professional Memberships
Dues for industry associations, chambers of commerce, and professional organizations.
Rent & Facilities
37. Office Rent
Monthly rent for office space, retail locations, or warehouse facilities.
38. Coworking Memberships
Fees for coworking spaces, hot desks, or shared office facilities.
39. Storage Units
Rental costs for storing business inventory, equipment, or documents.
40. Utilities
Electricity, gas, water, and trash for business premises.
Miscellaneous Deductions
41. Business Meals
50% of meals with clients, prospects, or employees when business is discussed (100% for employer-provided meals in 2026).
42. Gifts to Clients
Business gifts up to $25 per recipient per year.
43. Bad Debts
Uncollectible invoices that you've already reported as income.
44. Licenses & Permits
Business licenses, professional licenses, and required permits.
45. Shipping & Postage
Costs to ship products to customers or mail business correspondence.
Retirement & Self-Employment
46. SEP-IRA Contributions
Contribute up to 25% of net self-employment earnings (max varies by year).
47. Solo 401(k)
Higher contribution limits for self-employed individuals without employees.
48. Self-Employment Tax Deduction
Deduct the employer-equivalent portion (50%) of self-employment tax.
Often Overlooked Deductions
49. Startup Costs
Up to $5,000 in startup costs can be deducted in the first year. Remainder amortized over 15 years.
50. Moving Expenses (Business)
Costs to relocate business operations to a new location.
51. Charitable Contributions
Donations to qualified charities (different rules for different business structures).
52. Research & Development
R&D tax credit for developing new products, processes, or technologies.
How to Track Deductions Effectively
- Separate business and personal finances: Use dedicated business accounts and credit cards
- Save all receipts: Digital copies are acceptableâscan or photograph immediately
- Categorize expenses regularly: Don't wait until tax time
- Use accounting software: Automate tracking and categorization
- Document the business purpose: Note why each expense was incurred
Track Your Business Expenses for Free
BizziKit's accounting tools help you categorize and track deductible expenses throughout the year.
Start Tracking Expenses âKey Takeaways
- Keep meticulous records with receipts for all deductions
- Separate business and personal expenses
- Track deductions throughout the year, not just at tax time
- Consider working with a tax professional for complex situations
- Stay updated on tax law changes that affect deductions