Top 10 Tax Deductions Small Business Owners Miss Every Year
- Sophia Yu
- May 22
- 3 min read
Updated: May 23
Stop overpaying Uncle Sam—claim what’s yours!
As a small business owner, you're probably used to wearing all the hats—CEO, marketing director, customer service rep, and maybe even part-time bookkeeper. But when tax season rolls around, one wrong move (or missed deduction) could mean you’re leaving thousands of dollars on the table.
Here’s the good news: The IRS offers a lot of legal ways to reduce your taxable income. The bad news? Many of them go unnoticed—especially by busy entrepreneurs who try to DIY their taxes or rely on basic tax software.
1. Home Office Deduction
Yes, it’s real—and no, you don’t need a separate building. If you use part of your home regularly and exclusively for business, you can deduct a portion of rent, utilities, internet, and more.
2. Business Use of Your Car
Do you drive to showings, client meetings, or networking events? You can deduct either actual vehicle expenses or the IRS standard mileage rate (currently 67 cents per mile for 2024). That adds up fast.
3. Startup Costs
Just launched your business? You can deduct up to $5,000 in startup expenses, including legal fees, marketing, and research, in your first year.
4. Professional Fees
That accountant, legal advisor, or marketing consultant you hired? Their fees are 100% deductible.
5. Education and Training
Courses, webinars, real estate licensing fees, and industry conferences? All deductible if they help you grow or maintain your business.
6. Health Insurance Premiums (Self-Employed)
If you're self-employed and pay your own health insurance, you may be able to deduct 100% of those premiums—an often overlooked benefit.
7. Bank and Payment Processing Fees
Service charges, wire fees, Venmo for Business, or Square processing fees? All of these fall under deductible business expenses.
8. Software and Subscriptions
MLS tools, CRM software, Canva, Zoom Pro, DocuSign—if it's used for your business, it's likely deductible.
9. Meals with Clients
Take a client out to lunch to discuss listings or closing strategies? You can generally deduct 50% of that meal expense (just keep good records).
10. Retirement Contributions
Contributing to a SEP IRA or Solo 401(k)? You may reduce your taxable income significantly while saving for the future.
Real-Life Example: From Side Hustle to $15,000 Refund
Meet Alex, a new real estate agent who launched her business in 2024 while still working full-time at a W-2 job.
Together, we:
Claimed a home office deduction for her dedicated workspace
Tracked business mileage to open houses and showings
Wrote off startup expenses like her license, signage, and website
Deducted software like her CRM and Canva Pro
Reclassified some prior "personal" expenses as legitimate business costs
The result? She went from owing $5,000 in taxes to receiving a $15,000 refund. That’s a $20,000 swing.
What did she do next? She used that refund to invest in her first rental property—putting her real estate knowledge and her tax savings to work. Now she's building a business and a portfolio.
Every deduction you don’t claim is money you’re leaving on the table. Being your own boss comes with powerful tax benefits—if you know how to use them.
Want to make sure you’re not missing a single dollar? I specialize in helping small business owners—especially self-employed professionals like Alex—keep more of what they earn and use tax strategy to build wealth.
Book a strategy session with LightUp Tax today—and let’s uncover the savings waiting inside your next tax return.
Reach out to LightUp Tax today to schedule your consultation and
secure your spot for 2025 tax compliance and planning!
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