Top 5 Overlooked Tax Deductions for Small Business Owners

Running a business is tough enough—you shouldn’t be paying more in taxes than necessary. Yet many small business owners overlook deductions that can save thousands each year. Here are five big ones:

1. Home Office Deduction – If part of your home is used exclusively for business, you may qualify for valuable deductions on utilities, rent, or mortgage interest.
2. Health Insurance Premiums – Self-employed? You may be able to deduct premiums for yourself and your family.
3. Retirement Contributions – Setting up a Solo 401(k) or SEP IRA can reduce your taxable income while building long-term wealth.
4. Business Mileage & Vehicle Expenses – Track your business miles or deduct actual vehicle expenses. For heavy SUVs, trucks, and vans, Section 179 can be a game changer.
5. The Augusta Rule – Rent out your home to your business for meetings or events (up to 14 days a year) and deduct the expense—tax-free income in your pocket.

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1. Home Office Deduction

If you use part of your home exclusively for business, you may qualify for a home office deduction. This can include a portion of your rent or mortgage, utilities, and even home maintenance. For example, if your office takes up 10% of your home’s square footage, you can deduct 10% of eligible expenses.
Impact: It reduces your taxable income while letting you run your business from home more efficiently.

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2. Health Insurance Premiums

Self-employed business owners can deduct the cost of health insurance premiums for themselves, their spouse, and dependents—often overlooked if not running payroll. This includes medical, dental, and long-term care policies.
Impact: Not only does it lower taxable income, but it also ensures you’re covering a major expense with tax-free dollars.

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3. Retirement Contributions (Solo 401(k) / SEP IRA)

Contributing to retirement plans like a Solo 401(k) or SEP IRA provides two benefits: immediate tax deductions and long-term wealth building. Contributions can often reach tens of thousands of dollars annually, depending on your business profits.
Impact: You’re reducing this year’s tax bill while building wealth for your future. Business owners who work with us often combine retirement savings with strategic financial planning to build wealth faster.

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4. Business Mileage & Vehicle Expenses

If you use your vehicle for business, you can deduct mileage (65.5 cents per mile for 2023, adjusted yearly) or actual expenses like fuel, insurance, and repairs. Heavy SUVs, trucks, and vans may also qualify for full Section 179 expensing or bonus depreciation.
Impact: For businesses with lots of driving, this deduction can save thousands every year.

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5. The Augusta Rule (IRS Section 280A(g))

This little-known gem allows you to rent out your personal home to your business for up to 14 days per year at fair market value. The business gets to deduct the rent, and you receive the income tax-free.
Example: If your home rents for $1,000/day, you could earn $14,000 tax-free while your business takes a $14,000 deduction.
Impact: A win-win that creates tax-free income and lowers your company’s taxable profit.

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👉 Proactive tax planning means never missing these deductions again. Book a Free Consultation and learn how much you’re leaving behind.

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