5 Essential Tax Deductions Every Small Business Owner Must Claim!

Running a small business means every dollar matters. And let’s be real—tax season can feel like a confusing maze. But here’s the good news: knowing which tax deductions to claim can save you serious cash and keep more money in your pocket.

In this post, we’re breaking down five key tax deductions every small business owner should know about. Plus, we’ll share simple tips to help you actually claim them without the headache. Ready to find some money you didn’t even know you had? Let’s dive in!

1. Home Office Tax Deductions: Your Space, Your Savings

If you’re running your business from home, the home office deduction is a legit way to save some cash. It lets you write off a portion of your home expenses—think rent, utilities, and maintenance—based on how much space your office takes up.

To qualify, your home office needs to be used regularly and exclusively for business. (Sorry, no Netflix binge spots allowed here.)

You’ve got two ways to calculate your deduction:

The simplified method: $5 per square foot, up to 300 square feet (easy math, less paperwork).

The actual expenses method: Itemize your real costs and deduct your business-use percentage.

Either way, that dedicated corner or room could turn into a nice tax break.

Takeaway: Keep detailed records of your home office expenses. Measure your workspace accurately to maximize your deduction when filing.

2. Business Mileage: Yes, That Trip to Office Depot Counts

Using your car for business—whether it’s a client visit, supply pickup, or site stop—can lead to real deductions. For 2025, the IRS standard mileage rate is 70¢ per business mile.

If you're claiming miles from 2024, the rate was 67¢ per mile.

Prefer to go the detailed route? You can also track actual expenses—like gas, maintenance, insurance, and even car depreciation. Then apply your business-use percentage to determine your deduction.

Takeaway: Maintaining an accurate mileage log is crucial. Consistency will help you maximize your vehicle expense deductions.

3. Equipment & Supplies: Let Your Tools Pay for Themselves

You know that printer that jams every time you hit “print”? It might be time to upgrade—and the IRS agrees. Supplies and equipment you use to run your business are tax-deductible. That includes things like laptops, printers, office furniture, monitors, and even that standing desk you’ve been eyeing.

The good news? You can typically deduct the full cost of supplies in the year you buy them. And for larger equipment purchases, the Section 179 Deduction lets you write off big-ticket items all at once instead of depreciating them over several years. In 2024, you can deduct up to $1,220,000, which can make a major impact on your tax bill.

Bonus tip: Can’t write off the full amount under Section 179? You may still qualify for bonus depreciation—another way to maximize your deduction for qualified purchases.

Takeaway: Keep organized receipts and inventory lists of your supplies to support your claims during tax season.

4. Meals With Clients: Yes, That Lunch Can Be a Write-Off

Client lunches, networking dinners, or even grabbing a bite while traveling for business—meals tied directly to business activities are 50% deductible. So yes, that $18 kale salad can work a little harder for you.

Here’s the catch: The meal has to serve a legit business purpose. That means:

• You’re talking shop with a client, lead, or partner

• It happens in the context of business travel or events

• It’s not just you grabbing a solo lunch because you “needed a break” (unfortunately, those don’t count)

To claim it properly, the IRS wants receipts and a few quick notes:

• Who you met with

• What you discussed

• The date and location

Pro tip: Jot it down on the receipt or drop a note in your bookkeeping app while it’s fresh. Future-you will be grateful at tax time.

Bottom line: If it feeds your business (and your stomach), track it. You could be leaving easy deductions on the table.

5. Utilities: Because Wi-Fi Isn’t Free (and Neither is Running a Business)

Electricity. Water. Internet. Phone bills. If you're using it to keep your business running, it's likely deductible.

That includes:

• The internet you use to run your website or client meetings

• Your business phone line (or a portion of your cell phone bill)

• Power and water for your office or studio space

Working from home? You can still deduct a portion of your utilities—just make sure your home office meets the IRS's “regular and exclusive use” rule. The key is to calculate the business-use percentage accurately (and yes, we can help with that).

Quick Tip: Keep those utility bills organized and highlight business-related charges. It’ll make tax season way less stressful.

Bottom line: You’re already paying these bills. Might as well let them work for you at tax time..

Final Thoughts

Tax deductions don’t have to be overwhelming—or feel like a game of hide and seek. When you know what to look for and keep your records tight, you can uncover savings that make a real difference in your bottom line.

Here’s the deal:

Stay on top of your expenses, document everything, and don’t sleep on the power of a good deduction strategy. Tax laws change, but one thing stays the same—your ability to take control of your business finances.

Need a second pair of eyes (or just don’t want to do this alone)?

Our tax pros are here to help you get it right—and get back every dollar you deserve.

Because saving money is part of the strategy.

Book a Tax Strategy Session

Let’s make sure you’re not leaving money on the table.

🔗 Book Now

Happy claiming!

– The In The Moment Team