Running a small business means you’re used to wearing a lot of hats — and come tax time, you might be adding “accountant” to the list, too. Sure, you can use TurboTax or another tax software, and it’ll guide you through most of the basics — asking about your income, expenses, and a few common deductions.
But here’s the thing:
If you don’t already know what you should be looking for, it’s easy to miss valuable deductions that could save you serious money.
The more you understand about what’s available, the more confident (and prepared) you’ll be — whether you file yourself or work with a pro.
Here are five tax deductions every small business owner should know about (and claim!) in 2025, with simple examples to help you spot them when it’s time to file.
1. Home Office Deduction
If you work from home — even just a few days a week — you might be able to deduct part of your home expenses.
And no, you don’t need a giant fancy office. Even a small desk in the corner could count if it’s your primary workspace.
There are two ways to claim it:
- Simplified method: $5 per square foot (up to 300 square feet)
- Actual expenses method: Deduct a portion of your real costs, like rent, internet, and electricity
Example:
You turned your spare bedroom into your office and it’s 10% of your home’s total space. You could deduct 10% of your rent, utilities, and internet bills for the year.
2. Business Vehicle Expenses
If you drive your personal vehicle for work — meeting clients, making deliveries, attending conferences — those miles can add up to a nice deduction.
You can deduct:
- The standard mileage rate (the IRS sets this rate each year)
- Or actual expenses, like gas, repairs, insurance, and maintenance
Example:
You drove 5,000 business miles in 2025. If the IRS rate is 65 cents per mile, you could deduct $3,250.
(Remember: driving from your house to a regular office usually doesn’t count — but trips to client meetings do!)
3. Startup Costs
If you recently launched your business, don’t miss this one.
The IRS lets you deduct up to $5,000 of certain startup expenses like legal fees, business licenses, and initial marketing costs.
Example:
You spent $2,500 setting up your LLC and $1,500 building your first website. That’s $4,000 you can likely deduct.
4. Business Meals
Business-related meals are still deductible, but there are some rules.
Generally, if you’re meeting a client, vendor, or business partner and business is discussed, you can deduct 50% of the meal cost.
Example:
You take a client out to lunch and spend $80. You could deduct $40 on your taxes.
(Just make sure you document who you met with and why — a quick note like “Lunch with client to discuss new project” is enough.)
5. Retirement Contributions
Contributing to a retirement plan isn’t just smart for your future — it can help lower your tax bill today.
As a small business owner, you might be eligible for plans like:
- SEP IRA
- Solo 401(k)
- SIMPLE IRA
Money you contribute could be deducted from your taxable income.
Example:
You contribute $10,000 to a SEP IRA. That $10,000 could directly lower your taxable income, which might also lower how much you owe.
Taxes don’t have to be overwhelming — and you don’t have to be an expert to make smart moves for your business.
Knowing which deductions you qualify for puts you ahead of the game and helps you keep more of the money you worked so hard to earn. Whether you file with TurboTax, another software, or work with an accountant, being informed means fewer surprises and better savings.
Disclaimer: I am not a tax professional. This blog post is for informational purposes only and should not be considered legal or financial advice. Please consult with a qualified accountant or tax professional to address your specific situation.
