Small Business Tax Deductions Finder 2025 - S Corp, LLC & Sole Proprietor

Costs associated with promoting your business, including online advertisements, printed flyers, business cards, or sponsorships of events. These expenses must be ordinary and necessary for your trade or business to qualify as deductible.

Payments made to sales agents, referral partners, or online platforms for services like payment processing or brokerage fees, as long as they are directly related to generating business income.

Costs to maintain and repair business assets in their current condition, without adding significant value or extending life.

Deduction for the allocation of asset costs over time based on useful life and depreciation methods.

Deduction for the exhaustion of natural resources owned by the corporation.

Lease payments for business property, equipment, or vehicles used in operations.

Costs for promoting products or services through various media channels.

Expenses for using vehicles in your business, either using the standard mileage rate or actual expenses like gas, repairs, and insurance.

Note: Standard mileage rate for 2025: $0.70/mile

Costs for business travel away from your tax home, including airfare, lodging, and transportation, but not commuting.

50% of costs for meals during business travel or with clients, provided the meal is not lavish and has a business purpose.

Note: 50% deductible in 2025

Amounts paid to independent contractors or freelancers for work performed, such as graphic design or consulting. If payments exceed $600 per year to an individual, you must issue Form 1099-NEC.

Salaries and wages paid to employees, reduced by any employment tax credits such as the Work Opportunity Tax Credit (WOTC).

The cost of business assets like equipment or vehicles can be deducted over their useful life through depreciation, or you can elect to expense up to certain limits under Section 179. Bonus depreciation is available at 60% for qualified property placed in service in 2025.

Note: Section 179 limit for 2025: $1,220,000

Expenses for routine repairs and maintenance to keep business property in good working condition, but not for major improvements that add value.

Lease payments for vehicles, machinery, or equipment used in your business, prorated for business use if also used personally.

Rent paid for office space, retail locations, warehouses, or other real property used in the business.

Fees paid to attorneys, accountants, consultants, or other professionals for services directly related to your business operations or compliance.

Premiums for business-related insurance policies, including liability, property, malpractice, or workers' compensation insurance. Personal insurance does not qualify.

Costs for office supplies such as paper, ink, pens, and software subscriptions; these are items that are consumed quickly and not considered capital assets.

Costs of materials and supplies directly used in your business operations, such as raw materials for manufacturing or cleaning supplies for a service business.

Costs for utilities like electricity, water, heating, and internet service used in your business location.

Interest payments on mortgages or loans secured by business property, such as an office building or warehouse.

Interest on other business debts, like credit cards used for business purchases or unsecured loans for operating expenses.

Business-related taxes, including state and local taxes, payroll taxes, and fees for licenses, permits, or certifications required to operate.

Expenses for providing benefits to employees, such as health insurance premiums, group life insurance, or disability insurance, excluding retirement plans.

Contributions made to qualified retirement plans for employees, including SIMPLE IRAs, SEP IRAs, or 401(k) plans.

Deduction for the reduction in value of natural resources like oil, gas, or timber extracted from property. You can use either the cost depletion or percentage depletion method, depending on what provides the greater benefit.

Note: Applies to natural resource extraction businesses

A deduction of up to $0.54 to $1.08 per square foot for installing energy-efficient systems in commercial buildings, based on the level of energy savings achieved.

Compensation, including salaries, wages, bonuses, and other payments, provided to employees who are not partners. These must be reasonable, ordinary, and necessary for the business, and do not include payments to partners.

Fixed payments made to partners for services rendered or for the use of capital, which are deductible by the partnership even if the business incurs a loss. These payments are reported as income to the receiving partner.

Note: Deductible even if partnership has a loss

Expenses for routine repairs and maintenance of business property, equipment, or facilities to keep them in normal operating condition, excluding any costs that substantially improve or extend the life of the asset.

Payments for renting or leasing property, equipment, vehicles, or other assets used in the partnership's trade or business, including office space or machinery.

The systematic deduction of the cost of tangible business assets over their useful lives using methods like MACRS; Form 4562 must be attached to report details.

Interest paid on loans, credit lines, or other debts incurred for business purposes, subject to limitations like the business interest expense deduction rules under Section 163(j).

Note: Subject to Section 163(j) limitations

Deductions for business debts or accounts receivable that become partially or wholly worthless during the tax year, but only if the partnership uses the accrual method of accounting.

Various taxes paid by the partnership, such as state and local income taxes, real estate taxes, payroll taxes, and fees for business licenses, permits, or regulatory compliance.

Contributions to qualified retirement plans for employees, including pensions, profit-sharing plans, 401(k)s, or SIMPLE IRAs, within IRS limits.

Costs for providing non-retirement benefits to employees, such as health insurance, group term life insurance, disability plans, or educational assistance.

Deduction for the depletion of natural resources such as minerals or timber; however, oil and gas depletion is not deducted at the partnership level and is instead passed through to the partners.

Note: Oil & gas depletion passes through to partners

Deduction for costs associated with installing energy-efficient heating, cooling, lighting, or other systems in commercial buildings, calculated per square foot based on energy savings achieved.

Reasonable salaries, bonuses, and other compensation paid to officers who are also shareholders for services provided. The IRS scrutinizes these to ensure they are not disguised dividends, and payroll taxes must be withheld.

Note: Must be reasonable to avoid IRS scrutiny

Wages paid to employees (non-officers), reduced by any applicable employment tax credits like the Work Opportunity Tax Credit or Employee Retention Credit.

Costs to maintain and repair business assets in their current condition, without adding significant value or extending life.

Deduction for the allocation of asset costs over time based on useful life and depreciation methods.

Lease payments for business property, equipment, or vehicles used in operations.

Costs for promoting products or services through various media channels.

Interest on business borrowings, subject to limitations.

Business taxes and licensing fees.

Uncollectible business debts if using accrual method.

Contributions to employee retirement plans.

Health insurance and other employee benefits.

Reasonable compensation, including salaries and bonuses, paid to corporate officers for services rendered, subject to IRS reasonableness tests to prevent excessive deductions.

Note: Subject to reasonableness tests

Wages paid to employees, net of any employment-related tax credits claimed by the corporation.

Donations to qualified charities, limited to 10% of the corporation's taxable income before the deduction.

Note: Limited to 10% of taxable income

Costs to maintain and repair business assets in their current condition, without adding significant value or extending life.

Deduction for the allocation of asset costs over time based on useful life and depreciation methods.

Deduction for the exhaustion of natural resources owned by the corporation.

Lease payments for business property, equipment, or vehicles used in operations.

Costs for promoting products or services through various media channels.

Interest on business borrowings, limited by rules like Section 163(j) for large corporations.

Taxes imposed on the business, such as property taxes, and fees for necessary licenses and permits.

Deductions for uncollectible debts using the reserve method or specific write-off, depending on the corporation's accounting practices.

Contributions to employee retirement plans, including defined benefit and defined contribution plans.

Expenses for employee benefits like health plans, insurance, and other perks.