Top 10 Overlooked Tax Deductions That Could Save You Money
Most people don’t overpay taxes because they’re doing something wrong — they overpay because they don’t know what they’re allowed to deduct.
For small business owners, freelancers, and self-employed individuals, the tax code offers plenty of legitimate deductions. The problem is many of them are misunderstood, underused, or ignored entirely.
Below are 10 of the more commonly overlooked business-related tax deductions that could materially reduce your tax bill if used correctly.
A quick note before we start: deductions must be ordinary, necessary, and properly documented. If something feels aggressive or unclear, that’s a good time to ask a professional.
1. Home Office Deduction
If you use part of your home regularly and exclusively for business, you may qualify for the home office deduction.
This can include:
- A dedicated room
- A portion of a room used only for business
You can deduct a percentage of:
- Rent or mortgage interest
- Property taxes
- Utilities
- Insurance
- Repairs and maintenance
Two methods are available – simplified or actual expense. The simplified method takes a standardized cost per square foot. The actual expense method (as it sounds) take actual expenses (as listed above) as a proportion of the home. The method that is more beneficial depends on your situation.
2. Cell Phone Expenses
If you use your personal phone for business, a portion of your bill may be deductible.
This includes:
- Monthly service charges
- Business-related add-ons
- A percentage of the device cost (in some cases)
The key is reasonable allocation. You can’t deduct 100% if you also use it for personal use. You can, however, take a reasonable allocation that is related to business purposes. Most business owners miss this by taking nothing at all.
3. Internet Expenses
Similar to cell phones, internet costs are often overlooked.
If your internet is used for:
- Cloud software
- Client communication
- Research or operations
…then a business-use percentage is generally deductible.
This is especially relevant for:
- Remote businesses
- Online service providers
- Home-based operations
Similar to cell phone expenses, you typically won’t be able to deduct 100% of in-house internet, but a portion of it may be eligible to be deductible.
4. Mileage and Vehicle Expenses
Business driving adds up fast — and many people fail to track it.
You can generally deduct:
- Client meetings
- Business errands
- Travel between job sites
Without getting too far into the weeds, when it comes to vehicle expenses, you typically choose between either the standard mileage rate or actual vehicle expenses.
For many business owner’s who use their personal car for business use, tracking mileage for business use is most likely easier than trying to separate the percent of fuel, oil changes, or car repairs that were personal vs. business.
Whichever method you use, ensuring you track mileage is critical. Many apps exist that make this far easier than people expect.
5. Legal and Professional Fees
Fees paid for business-related professional services are often fully deductible, including:
- Tax preparation and planning fees
- Legal consultations
- Bookkeeping and accounting services
- Payroll processing
One common mistake: assuming tax prep fees aren’t deductible. Personal tax prep isn’t, but the business portion often is.
6. State and Local Taxes (Business Portion)
While personal SALT deductions are capped, business-related state and local taxes can still be deductible.
Examples include:
- State income taxes attributable to the business
- Gross receipts taxes
- Business licenses and local fees
- Property taxes
Again, maybe a little more complex of an area but for those who have LLC’s, if you are taxed as an S-Corp or Partnership you may qualify for pass-through entity tax – where the LLC pays state income tax on behalf of the individual and then passes a state tax credit. Essentially, this means the business pays its tax and can deduct that portion on the Federal return.
7. Business Meals (Still Deductible — Just Different)
Business meals are no longer 100% deductible in most cases (like they were a few years ago), but 50% is still allowed when:
- The meal is business-related
- You are present
- The expense is reasonable
This includes meals with:
- Clients
- Prospective clients
- Business partners
The rules changed post-pandemic, which caused confusion — and many people simply stopped deducting meals entirely. Again there are complexities in what qualifies as 100% deductible, 50% deductible, and 100% nondeductible so talk with your trusted advisor to make sure you are recording meals appropriately.
8. Software and Subscriptions
Monthly subscriptions often feel small, but they add up — and many are deductible.
Common examples:
- Accounting software
- Design tools
- Scheduling apps
- Cloud storage
- Industry-specific platforms
For the truckers or others who spend a lot of time traveling:
- Spotify
- Sirius XM
- YouTube Premium
If the software is used for business, it’s usually deductible — even if it’s a recurring subscription.
9. Education and Training
Education expenses are deductible when they maintain or improve skills related to your existing business.
This can include:
- Courses
- Certifications
- Workshops
- Industry conferences
The important distinction here is that the education improves your current business — not whether it helps you start a brand new one. For example, if you run a beauty salon and you take classes to learn different makeup or hair-cutting techniques, those are deductible. However, if your business is a legal practice and you take those same makeup or hair-cutting classes, those are not deductible. The bottom line, if you want education and training to be deductible, make sure you have a legitimate business first and then you can deduct education and training.
10. Retirement Contributions for Business Owners
While not always thought of as a “deduction,” retirement contributions can significantly reduce taxable income.
Options may include:
- SEP IRA
- Solo 401(k)
- Employer contributions
These strategies do double duty:
- Lower current taxes
- Build long-term wealth
Many business owners wait too long to explore these options — often missing years of tax savings.
A Quick Reality Check
Just because a deduction exists doesn’t mean:
- It applies to everyone
- It should be maximized aggressively
- It can be taken without documentation
Good tax strategy is about optimization, not pushing boundaries.
To Conclude
Overlooked deductions don’t usually come from complicated loopholes — they come from everyday expenses that aren’t viewed through a tax lens. Again, the most important tax savings come from expenses you’re already incurring, you just aren’t tracking properly or don’t know that they are deductible.
If you’re operating a business, even a small one, there’s real value in reviewing your expenses intentionally. And if you’re unsure whether something qualifies, that’s exactly when it makes sense to ask your trusted tax professional.
If you don’t have a trusted tax professional or if you’d like a second set of eyes on your situation or want help identifying deductions specific to your business, feel free to reach out — I’m happy to help.
– Brendan Tiedeman, CPA, CVA
