Every Deduction Your Small Business Can Take in 2026.
The complete CPA-written guide to every deduction available to small business owners — with amounts, limits, and real-world examples.
A guide by Taxstra Tax & Accounting — CPA-led tax strategy for business owners
The Top 15 Deductions for Small Business
Every deduction your business is entitled to, with current amounts and limits for the 2026 tax year.
Home Office
$5/sq ft simplified, or actual expenses
If you use a dedicated space in your home exclusively and regularly for business, you can deduct a portion of rent/mortgage interest, utilities, insurance, and repairs. The simplified method allows $5 per square foot up to 300 sq ft ($1,500 max).
Vehicle Expenses
72.5¢/mile in 2026 or actual expenses
Deduct business miles driven using the standard mileage rate or actual vehicle costs. Keep a mileage log with date, destination, business purpose, and miles driven. Commuting miles are never deductible.
Health Insurance
100% deductible for self-employed
Self-employed business owners can deduct 100% of health, dental, and vision insurance premiums for themselves, their spouse, and dependents. This is an above-the-line deduction that reduces AGI.
Retirement Contributions
Solo 401k: $24,500 + 25% employer
Solo 401(k) contributions allow $24,500 as an employee (plus $8,000 catch-up if 50+) and up to 25% of net self-employment income as the employer contribution. SEP IRAs allow up to 25% of compensation.
Business Meals
50% deductible
Business meals with clients, prospects, or employees are 50% deductible. You must document the business purpose, who attended, and what was discussed. Lavish or extravagant meals may be challenged.
Professional Services
CPA, lawyer, consultants: 100%
Fees paid to CPAs, attorneys, consultants, and other professionals for business-related services are 100% deductible. This includes tax preparation fees for business returns, legal fees for contracts, and advisory services.
Software & Subscriptions
QuickBooks, Zoom, etc.
Business software subscriptions, SaaS tools, project management platforms, cloud storage, and communication tools are all fully deductible. If used for both personal and business, deduct only the business percentage.
Education & Training
Courses, certifications, conferences
Education that maintains or improves skills in your current business is fully deductible. This includes courses, certifications, conferences, workshops, books, and even travel to educational events.
Supplies & Equipment
Section 179: up to $2,560,000
Business equipment and supplies can be fully expensed under Section 179 up to $2,560,000 in 2026 (raised from $1.22 million by the OBBBA, phasing out above $4,090,000 of purchases). This includes computers, furniture, machinery, and tools. Items must be used more than 50% for business.
Insurance
Liability, E&O, workers comp: 100%
Business insurance premiums including general liability, professional liability (E&O), workers compensation, property insurance, and cyber liability are all fully deductible as ordinary business expenses.
Advertising & Marketing
Website, ads, SEO: 100%
All advertising and marketing expenses are fully deductible: website development, Google Ads, social media ads, SEO services, business cards, brochures, and promotional materials.
Rent & Utilities
Office space, coworking: 100%
Rent for office space, coworking memberships, and associated utilities (electric, internet, water) are fully deductible for the business-use portion. Home-based businesses use the home office calculation.
Travel
Airfare, hotels, Uber: 100%
Business travel expenses including airfare, hotels, rental cars, rideshares, parking, and tips are 100% deductible. The trip must be primarily for business. Mixed trips require allocation between business and personal days.
Interest
Business loans, credit cards: 100%
Interest paid on business loans, lines of credit, and business credit cards is fully deductible. This includes SBA loan interest, equipment financing, and merchant cash advance fees.
Depreciation
Equipment, vehicles over 6,000 lbs
Large assets can be depreciated over their useful life or accelerated using bonus depreciation. Vehicles over 6,000 lbs GVWR qualify for enhanced Section 179 deductions — a strategy frequently used for trucks and SUVs.
Deductions Most Business Owners Miss
These lesser-known strategies can save thousands — but most CPAs don't bring them up unless you ask.
Augusta Rule (Section 280A)
Rent your home to your business for up to 14 days per year for board meetings or company events. The business gets a deduction, and you receive the rental income completely tax-free. At fair market rates of $1,000–$5,000/day, this can shelter $14,000–$70,000.
Learn More →Hiring Your Children
If you're a sole proprietor or single-member LLC, you can hire your children under 18 and their wages are exempt from Social Security and Medicare taxes. Their standard deduction shelters the first $16,100 (2026) from income tax entirely.
Accountable Plan Reimbursements
S-Corp owners can set up an Accountable Plan to reimburse themselves tax-free for home office use, cell phone, internet, mileage, and other out-of-pocket business expenses. The business gets a deduction, and the reimbursement is not taxable income.
Learn More →HSA Contributions
If you have a high-deductible health plan, contribute the max to a Health Savings Account — $4,400 for individuals or $8,750 for families in 2026. Triple tax benefit: deductible going in, grows tax-free, and comes out tax-free for medical expenses.
Charitable Giving Through Your Business
C-Corps can deduct charitable contributions directly. S-Corp owners can use charitable strategies like donating appreciated stock or setting up a Donor Advised Fund to bunch deductions into a single year for maximum tax benefit.
These strategies require setup before the tax year ends.
The Augusta Rule requires documented board meeting minutes. Accountable Plans require a written policy. Hiring children requires real, legitimate work. None of these can be retroactively applied after December 31.
Stop Leaving Money on the Table
A complete deduction review starts with dependable books and documentation. Our CPA team reconciles the records, identifies questions, and helps resolve treatment before filing.
Free working checklist
Document the expense before deciding the treatment
The downloadable CSV organizes categories, source records, bookkeeping accounts, reviewer status, and the owner questions that commonly delay a clean year-end handoff.
S-Corp Election
Review entity eligibility, owner compensation, administration, and implementation.
Learn More →Augusta Rule
Review the requirements and documentation with a CPA before implementation.
Learn More →Accountable Plan
Build a documented business-expense reimbursement process.
Learn More →Quarterly Taxes
Coordinate projections, payment timing, and cash planning.
Learn More →Business Owner Health Insurance
Compare entity-specific treatment and documentation requirements.
Learn More →Tax Deductions FAQ
Your questions about small business deductions, answered.
Build a Defensible Deduction Process.
Bring the books, documents, and business context together before the return is prepared. Book a call to review the accounting and tax workflow.
Find Out What You're Overpaying in Taxes
Book a free 30-minute call to walk through your situation. We'll tell you exactly how our CPA-led team can help — and whether we're the right fit.