Every year, small business owners pay tax on money they could have deducted. Usually it is not because they are cutting corners. It is because nobody told them, or the receipts never made it to the bookkeeper.
Commonly missed deductions
- Home office: if you use part of your home regularly and only for business, you may qualify. The simplified method allows $5 per square foot, up to 300 square feet.
- Business mileage: the IRS standard rate is 72.5 cents per mile for 2026. Client meetings, supply runs, and bank trips add up fast, but only if you log them.
- Half of self-employment tax: you can deduct the employer-equivalent portion.
- Self-employed health insurance: premiums for you and your family may be deductible if you are not eligible for an employer plan.
- Retirement contributions: money you put into a SEP IRA or Solo 401(k) can lower your taxable income. See how much you can save.
- Phone and internet: the business-use percentage counts.
- Software and subscriptions: accounting software, design tools, cloud storage, and industry memberships.
- Payment processing and bank fees: card processing and payout fees are easy to miss when they are taken out before deposit.
- Professional fees: bookkeeping, tax preparation, and legal help for your business.
The real secret: good records
A deduction you cannot prove is a deduction you probably should not take. Keep receipts, log mileage as you go, and reconcile your books monthly so nothing slips through.
The bottom line
You do not need loopholes. You need clean books and a list like this one at tax time.
This is general information, not tax, legal, or financial advice. Rules and limits change, so check with a tax professional about your own situation.