Use this 2025 checklist to keep more of what you earn—legally. Below are 12 deductions most small businesses overlook, with quick examples and what records to keep. Educational only; talk with a tax pro for your facts.
1) Home Office Deduction (2025)
When it applies: You use part of your home regularly and exclusively for business.
Two methods: Simplified = $5/sq ft up to 300 sq ft (max $1,500). Actual = business % of mortgage/rent, utilities, insurance, repairs, depreciation.
What to track: Square footage + bills (if using actual).
Example: 200 sq ft × $5 = $1,000 deduction (simplified).
2) Vehicle Expenses & Mileage (2025)
Choose one per vehicle: Standard mileage = 70¢/mile for 2025, or Actual expenses = business % of gas, insurance, repairs, lease/interest, depreciation.
What to track: Date, miles, origin/destination, business purpose (keep a log/app).
Example: 2,000 miles × $0.70 = $1,400 deduction.
3) Section 179 Expensing (2025)
What it is: Expense qualifying equipment/software placed in service this year.
2025 limits: Up to $1,250,000, phasing out after $3,130,000 of purchases. Many SUVs (6,001–14,000 lbs GVWR) have a $31,300 §179 cap.
Example: $40,000 qualifying equipment used 100% for business → generally expense the full $40,000 (subject to income/other limits).
4) Bonus Depreciation (First-Year “Special” Depreciation)
What it is: A first-year write-off for eligible assets on top of (or instead of) regular depreciation. Rules changed for 2025; treatment can vary by acquisition and in-service dates. We’ll confirm the best mix with §179 for your situation.
What to track: Purchase docs, placed-in-service date, business-use %.
5) Retirement Contributions (SEP IRA / Solo 401(k))
Solo 401(k) (2025): Employee deferral up to $23,500 (+ catch-up if eligible). Overall employee+employer limit up to **$70,000** (plan rules apply).
SEP IRA (2025): Up to 25% of net earnings, capped around $70,000.
What to track: Payroll/comp, plan docs, deposit dates. Ask us which plan fits best.
6) Self-Employed Health Insurance
What it is: An above-the-line deduction for medical, dental, and qualified long-term care premiums (subject to rules; use Form 7206).
What to track: Premium invoices, months covered, marketplace subsidies (if any).
7) Meals & Travel
Meals: Generally 50% deductible when business-related and properly documented. Travel: Airfare, lodging, rides, and incidental costs for overnight business trips.
What to track: Who/what/why for meals; receipts + trip purpose/itinerary for travel.
8) Education & Professional Development
Courses, webinars, licenses, and certifications that maintain or improve skills for your current business are deductible.
What to track: Course receipts, agendas/syllabi, CPE/CE credits.
9) Business Insurance & State/Local Taxes
General liability, professional liability (E&O), workers’ comp, and business property insurance—plus state/local business taxes and fees—are typically deductible.
What to track: Policy invoices, state filings.
10) Advertising, Marketing & Website
Ads, printing, sponsorships, directory listings, domain/hosting, design, SEO, stock photos, and content creation.
Pro tip: Link readers to services inside your posts (like this article). See our Business Tax Preparation.
11) Software, Subscriptions & Supplies
Accounting, CRM, payroll, project tools, e-signature, cloud storage, office supplies, and small equipment may be deductible.
De minimis safe harbor: Many small items ≤ $2,500 per invoice/item can be expensed under the tangible property regs—keep invoices and make the annual election with your return.
12) Startup & Organizational Costs
New business? You can generally deduct up to $5,000 of startup costs and $5,000 of organizational costs in the first year (reduced as total costs exceed $50,000); the rest is amortized.
What to track: Entity filing fees, legal/accounting, market research, training, advertising before opening.
Frequently Asked Questions (FAQs)
What’s the best way to track mileage?
Use a mileage app that logs date, distance, and business purpose—export a report at year-end. Keep repair receipts showing odometer readings.
Can I take both Section 179 and bonus depreciation?
Often yes—§179 is applied first, then bonus depreciation on the remaining basis (subject to current-year rules and limits). We’ll optimize this for cash-flow and audit-safety.
Do all meals qualify?
No. Meals must be ordinary, necessary, not lavish, and tied to business. Keep the receipt and who/what/why. Most client/business meals are 50% deductible.
What is the 20% QBI deduction?
Eligible pass-through owners may deduct up to 20% of qualified business income, subject to income thresholds, W-2 wage/property tests, and SSTB limits.
Get More Deductions — Legally
Talk with Pedro Henriquez, EA. We’ll review your 2025 deductions, set up clean records, and file with confidence.
Last updated: August 24, 2025
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