Operating Expenses
Home Office Deduction
Deduct portion of rent, utilities, insurance, and repairs for space used exclusively for business.
💡 Tip: Simplified method allows $5/sq ft up to 300 sq ft ($1,500 max). Regular method may yield higher deduction.
Vehicle Expenses
Standard mileage rate (67¢/mile for 2024) or actual expenses (gas, insurance, repairs, depreciation).
💡 Tip: Keep detailed mileage log. Apps like MileIQ make tracking easy.
Business Meals
50% deductible for meals with clients, prospects, or employees for business purposes.
💡 Tip: Document who attended, business purpose, and amount on receipt.
Professional Development
Conferences, courses, certifications, books, and subscriptions that improve business skills.
💡 Tip: Travel to conferences is also deductible if primary purpose is business.
Software & Technology
QuickBooks, Microsoft 365, Adobe Creative Cloud, CRM systems, website hosting, and domain names.
💡 Tip: Subscriptions under $2,500 can be expensed immediately vs. depreciated.
Equipment & Assets
Section 179 Deduction
Deduct up to $1,220,000 for equipment, vehicles, and software purchased and placed in service during the tax year.
💡 Tip: Must be purchased by December 31st to qualify for current year.
Bonus Depreciation
Additional first-year depreciation for qualifying property (60% for 2024, phasing down).
💡 Tip: Can be used in addition to Section 179 for maximum deduction.
Employee-Related Deductions
Salaries & Benefits
Wages, bonuses, health insurance, retirement contributions, and payroll taxes.
💡 Tip: Owner health insurance premiums may be deductible on personal return.
Retirement Plan Contributions
SEP-IRA, SIMPLE IRA, or 401(k) contributions for yourself and employees.
💡 Tip: SEP-IRA allows up to 25% of compensation or $69,000 (2024 limit).