10 Small Business Tax Deductions Every Entrepreneur Must Know
“There’s no good reason you should ever pay more than you have to — in fact, it’s your right as an American not to pay more than you have to.”
— Tony Robbins, Money: Master the Game
Unlocking Financial Power: Why Tax Deductions Matter for Your Business
If you want to build a business that thrives, you must master both offense and defense. That means maximizing your revenues and minimizing unnecessary expenses—including taxes. Remember, it’s not about your resources, it’s about your resourcefulness. The more you know, the more you can keep in your business to fuel growth, innovation, and impact.
Knowledge is the first step to empowerment. When you understand the tax deductions available to you, you take back control and put more money to work for your vision. Here are 10 essential small business tax deductions that can help you keep more of what you earn and accelerate your journey to financial freedom.
1. Home Office Deduction: If you run your business from home and have a dedicated workspace, you can deduct a portion of your rent, utilities, and insurance. Calculate the percentage of your home used for business, and apply that to your expenses. For example, if your office is 10% of your home’s square footage, you can deduct 10% of those costs. This is about turning your environment into an asset.
2. Car and Vehicle Expenses: Business-related driving can be a powerful deduction. Track your business miles and either use the IRS standard mileage rate or, often more powerfully, calculate the percentage of business use and apply it to all car expenses—gas, maintenance, even car washes. Remember, commuting doesn’t count, but every purposeful trip for your business does.
3. Business Software and Equipment: Investing in the right tools is essential for growth. Under Section 179, you can deduct the cost of business software and equipment put into use during the tax year, as long as it’s primarily for business. This is about leveraging technology to multiply your results.
4. Bonus Depreciation: Big purchases like machinery, computers, or office furniture can be written off faster thanks to bonus depreciation. The 2017 Tax Cuts and Jobs Act expanded this benefit, so plan your purchases strategically to maximize your deduction and free up cash flow.
