Running a business comes with expenses, but many of them could be tax-deductible. This could help lower your taxable income and reduce the amount you owe.

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[Free Course] 25 Tax Saving Strategies That Could Save You Thousands

[Free Course] 25 Tax Saving Strategies That Could Save You Thousands

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Here’s how it works:

✅ Calculate your gross income. This is the total money your business earned during the year.
✅ Subtract qualified expenses. Common deductions include rent, salaries, and office supplies.
✅ Determine your taxable income. After deductions, you only pay taxes on the remaining amount.

This guide covers 30 major tax deductions businesses may claim in 2025. Knowing what qualifies could help reduce your taxable income, depending on your business structure and eligible expenses.

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Lorilyn Wilson, CPA, teaches you how to properly set-up your business (from choosing the right business entity to creating a financial forecast) and the must-dos ALL business owners need to understand when it comes to preparing your taxes (including expenses, write-offs, and how-to lower your risk of being audited).

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Table of contents

What Counts as a Business Expense?

Not every cost qualifies as a tax deduction. To determine what expenses could be  deductible, you can check the IRS guidelines and regulations or consult your bookkeeper or accountant. 

In most cases, a deductible business expense must be:

✅ Ordinary – Common and widely accepted in your industry.
✅ Necessary – Helpful and appropriate for running your business.
✅ Reasonable – Not excessive in amount.

📝 Note: Not all deductions apply to every business. Each situation is unique, and taking improper deductions could result in penalties. It’s generally best to consult with a qualified tax professional to ensure compliance.

30 Biggest Tax Write-Offs for Businesses

Many business expenses could be tax-deductible which may help reduce your taxable income. 

Here are 30 deductions that many businesses may be eligible to claim:

  1. Business meals– Deduct up to 50% of the cost if the expense is ordinary and necessary for business.
  2. Advertising and promotion – Covers flyers, commercials, promotional events, and online ads.
  3. Vehicles – Deduct costs for operating, maintaining, and repairing a business-use vehicle.
  4. Office supplies and equipment – Covers paper, pens, ink, computers, printers, telephones, etc.
  5. Rent and utilities – Deduct expenses for office rent, electricity, water, and internet.
  6. Depreciation – Spread out deductions for long-term assets like vehicles or equipment. For example, a company car with a 5-year depreciation could allow a 20% deduction per year for five years.
  7. Employee salaries and benefits – Deduct wages, health insurance, and retirement contributions.
  8. Legal and professional fees – Includes accountant, attorney, or consultant fees.
  9. Interest on business loans – Deduct interest paid on business-related loans.
  10. Business insurance – Covers insurance premiums for liability, property, and workers’ compensation.
  11. Charitable contributions – Sole proprietorships and LLCs may be able to deduct qualifying donations on the owner’s personal return, subject to IRS limits. Corporations have different deduction rules.
  12. Start-up costs – Write off qualified expenses like market research and initial advertising when launching a business, up to $5,000. 
  13. State and local taxes – State and local business taxes may be deductible, but deduction limits (such as the SALT cap) apply only in certain cases. Check with a tax professional to understand your eligibility. 
  14. Employee training and development – Deduct costs for workshops, certifications, and skills training.
  15. Home office expenses – If you use a dedicated space in your home regularly and exclusively for business, you may deduct a portion of rent, mortgage interest, and utilities.
  16. Supplies and raw materials – Includes materials used to create products or deliver services.
  17. Repairs and maintenance – You may be able to deduct costs for fixes to equipment or business property that meet IRS criteria
  18. Software and subscriptions – Covers business-related software, cloud storage, and industry subscriptions.
  19. Business licenses and permits – Deduct costs for obtaining or renewing required permits.
  20. Rent for business property – Write off lease expenses for business locations.
  21. Business use of personal property – If using personal items for business, deduct the fair market value of that use.
  22. Health insurance premiums – Deduct premiums paid for employee health insurance.
  23. Pension and profit-sharing plans – Deduct costs related to retirement plans for employees.
  24. Business travel – Covers airfare, lodging, meals, and local transport during work trips.
  25. Business gifts – Deduct up to the allowable limit for client or employee gifts.
  26. Marketing and sales materials – Includes brochures, flyers, and branded merchandise.
  27. Professional memberships – Write off dues for trade associations and industry groups that are directly related to your trade or business.
  28. Bank fees – Deduct charges for business bank accounts, ATM withdrawals, and wire transfers.
  29. Safety equipment – Includes protective gear like hard hats, safety glasses, and gloves.
  30. Business meetings and conferences – Deduct costs for attending industry events, including travel and lodging.

While these deductions may help lower your taxable income, eligibility varies. Tracking your expenses and consulting a tax professional is generally the safest route.

📌 Also read: Standard Deduction vs Itemized Deduction: Which One’s Better?

How to Claim Business Tax Deductions

To claim business tax write-offs, you’ll need to file a business tax return with the IRS. The process can vary depending on the type of business structure you have, but these are the general steps:

✅ Step 1: Gather Financial Records and Receipts

Keep detailed records of all your business expenses throughout the year, including receipts, invoices, and bank statements.

✅ Step 2: Identify Eligible Expenses

Review the IRS guidelines to determine which expenses are eligible for tax deductions. Make sure your expenses meet the criteria of being ordinary, necessary, and reasonable. You can also ask your accountant if you’re unsure.

✅ Step 3: Calculate Taxable Income

Start with your gross income (total earnings), then subtract qualified business expenses. The result is your taxable income, which determines how much you owe in taxes.

✅ Step 4: Complete and File Your Tax Return

Choose the correct tax form based on your business structure (e.g., Schedule C for sole proprietors). Fill it out with your financial details and deductions.

✅ Step 5: Claim Your Tax Write-Offs

On your tax return, list the eligible business expenses you could claim as tax write offs. These expenses could reduce your taxable income, which could lower your tax liability.

Keeping accurate records and staying informed about deductions could help you save money. If needed, consult a tax professional for guidance.

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