By Callum 
Want to keep more money in your business?
There’s a secret every small business owner should know about tax deductions. Hint: It doesn’t have to do with cheating or sneaking around the IRS.
Here it is: Over 90% of small businesses miss deductions every year. Owners end up leaving thousands of dollars on the table – and paying Uncle Sam way too much.
Why? Because most business owners aren’t trying to cheat themselves out of deductions. They just don’t know which ones apply to them. Tax laws change every year. It’s easy to get behind and miss out.
That’s why you need to work with professional tax services. Experienced small business tax accountants in Denver or your area will maximize the deductions you claim. They stay on top of tax law changes and know which ones will save your business the most money.
Here’s what you’re about to learn:
- Why Small Businesses Pay More in Taxes Than They Should
- The Most Overlooked Tax Deductions for Small Businesses
- How to Track Deductions Throughout the Year
- When Professional Tax Services Pay for Themselves
Why Small Businesses Pay More in Taxes Than They Should
The most obvious reason small businesses pay more taxes than they should is that they don’t keep accurate records year-round.
By tax time, receipts are lost, expenses are forgotten, and deductions are missed.
The IRS says deductible expenses are any that are “ordinary and necessary” for your business. Ordinary expenses are ones that your type of business typically incurs. Necessary expenses are ones your business would have a hard time existing without.
Translation: If you spend money to operate your business, it’s likely deductible.
The IRS has a handy list of common business expenses you can download here.
And guess what? Those deductions add up. That morning coffee you buy a client while discussing business? Deductible. The software subscription you pay monthly? Deductible. The office building you lease every year? Deductible.
The problem is, business owners don’t have the records to prove it. Remember, “a poorly prepared tax return is one that has not been adequately documented.”
The Most Overlooked Tax Deductions for Small Businesses
We’re about to talk about the top deductions that small businesses overlook the most. These could be saving you serious money.
Vehicle Expenses
Let’s start with a big one: vehicle expenses.
Do you drive your car for business? The IRS allows you to deduct 70 cents per mile for 2025. That’s the highest per mile deduction ever.
If you drive 10,000 business miles this year, that’s $7,000 right there.
Most business owners forget to track business miles or don’t realize this deduction exists. But a simple mileage tracking app turns every client visit into savings on your taxes.
Of course, you can also deduct actual vehicle expenses like gas, repairs, insurance, and maintenance. Figure out both and take the bigger deduction.
Home Office Deduction
Work out of a home office? Good news: the home office deduction isn’t as difficult as most people think.
For 2025, the simplified home office deduction is $5 per square foot of your dedicated office space. Maximum 300 square feet. No utility bills to track.
Say your home office is 200 square feet. You’re looking at $1,000 right there.
Requirements: your office space must be used regularly and exclusively for business. Kitchen table or a family room corner won’t cut it. But a dedicated office in a spare bedroom? Perfect.
Section 179 Equipment Deduction
This is one of my favorite sections for small businesses that need to buy equipment.
Need to buy equipment for your business? Section 179 allows you to deduct up to $1,250,000 in 2025 of qualifying equipment purchases. That’s right. Instead of depreciating that $50,000 piece of equipment over five years, you can deduct the entire amount this year.
Computers, software, vehicles, machinery, and even office furniture can qualify. Equipment must be used for business at least 50% of the time to qualify.
Pass-Through Business Deduction
If you don’t own a C-corporation, here’s a deduction most small business owners have probably never heard of…
If you’re a sole proprietorship, partnership, S-corp, or LLC, you may be eligible for the Pass-Through Business deduction. It allows you to deduct up to 20% of your qualified business income.
How much money are we talking about here? Let’s do the math:
Business nets $100,000. Pass-Through Business deduction = $20,000. Taxable income is now $80,000. You’ve got a $20,000 deduction waiting to save you thousands on your taxes.
Startup Costs
I saved the startup costs deduction for last because of one reason…
You can deduct up to $5,000 of startup costs the year your business launches. This includes market research, legal fees, employee training, and travel expenses associated with planning your business.
Plus, there’s no expiration on how far back those startup costs can go. Did you take a continuing education class two years before opening your business? Did it help you get your business started? It might count as a startup cost.
How to Track Deductions Throughout the Year
Okay, what happens now? How do you make tracking all these deductions happen?
The biggest mistake small business owners make is waiting until December to think about taxes. Receipts get lost. Expenses get forgotten. Deductions get missed.
Do yourself a favor and start tracking them now.
Set up a simple system today to keep track of your expenses. Use accounting software that syncs with your bank accounts and credit cards. Every business expense gets categorized as it happens.
No more shoebox of receipts. No more last-minute scramble for this deduction or that expense.
Take photos of receipts as soon as you get them. You’d be surprised how many smartphones come with free apps that let you scan and organize your receipts. This is especially important for cash purchases not reflected in bank statements.
Track business mileage in an app. Manual mileage logs are painful and easy to forget. Automatic mileage tracking apps use GPS to record every business trip. Many apps even let you categorize the trip with a single tap.
Keep business and personal expenses separate. Use a dedicated business credit card and checking account. Makes it crystal clear which expenses are deductible and which are not.
When Professional Tax Services Pay for Themselves
Before we wrap up, there’s one last thing most business owners don’t know about professional tax services.
The cost of hiring a tax professional is fully deductible. If you pay an accountant $1,500 to do your taxes, that reduces your taxable income by $1,500.
But more importantly, a good tax professional will find deductions you never even considered. Tax laws change every year. Professionals know which expenses qualify and which don’t. They can even help you plan expenses throughout the year to minimize your taxes.
Consider this: If a tax professional costs you $1,500 but finds $8,000 in deductions you would have missed, it’s worth every penny. That’s not even counting the time you save or the peace of mind knowing your taxes are done right.
Professional tax services also protect you in the event of an audit. If the IRS comes knocking, having a professional who knows your business and can explain your deductions is invaluable.
Taking Action on Your Tax Strategy
Small business tax deductions are not complicated. They’re just detailed.
The difference between paying too much in taxes and maximizing your deductions is knowing what’s deductible, keeping good records, and getting professional help when needed.
Start by reviewing the deductions listed here. Which apply to you? Which are you missing? Set up systems to track those expenses from this point forward.
Keep in mind that every legitimate business expense you track is money you’re keeping in your business instead of Uncle Sam. It can be used to hire that first employee. Upgrade equipment. Take that vacation you’ve been promising yourself.
Tax laws change every year. New deductions become available while others disappear. Staying on top of these changes or working with someone who does will ensure you’re always maximizing your deductions and minimizing your taxes.
The successful businesses are the ones that treat tax planning as a year-round activity, not a once-a-year scramble. Make deduction tracking part of your regular business routine and watch how much more money you keep in your pocket.
Uzair Abbasi