Small business tax deductions checklist 2026

Here are the deductions that matter most, with the 2026 IRS numbers where applicable. Home office deduction: If you use part of your home exclusively for business, you qualify. The simplified method lets you deduct $5 per square foot, up to 300 sq ft ($1,500 max). The actual-cost method can go higher but requires tracking rent, utilities, and mortgage interest by percentage. Used exclusively for business — that's the IRS test. A spare bedroom that also holds a treadmill won't pass.

Business vehicle: Track mileage for every business trip. The 2026 IRS standard mileage rate is 70 cents per mile. Drive 10,000 business miles and you deduct $7,000. Keep a mileage log — date, destination, purpose. Apps like MileIQ or a simple spreadsheet work fine.

Section 179 equipment: Bought a computer, printer, or machinery? Section 179 lets you deduct the full cost in the purchase year rather than depreciating it over five to seven years. Everyday office supplies don't need Section 179 at all — they're simply deductible as ordinary expenses in the year you buy them. The 2026 deduction limit is $1,220,000. That covers most small business equipment purchases entirely.

Health insurance premiums: Self-employed owners can deduct 100% of health insurance premiums for themselves, a spouse, and dependents. Some small businesses also qualify for a separate tax credit for offering health coverage, which is worth checking alongside the deduction. This comes off income tax and self-employment tax on Schedule 1. You can't deduct more than your net business income, but for most owners it's a full deduction.

Retirement contributions: A SEP-IRA lets you contribute up to 25% of net self-employment income, max $69,000 for 2026. A Solo 401(k) allows up to $23,500 in employee contributions plus the 25% employer side. Either one reduces taxable income now and builds savings. Contributions made before the tax filing deadline (including extensions) count for the prior tax year, and making the contribution before your final tax payment is due can still lower what you owe for that year. ProTax USA can run the numbers on all of these and tell you which deductions your small business actually qualifies for before you file. Call or book online today.

You can claim deductions you've already earned, or you can plan ahead to earn more before December 31. Both matter. If you have cash at year-end, accelerate deductible expenses. Buy the equipment you were going to buy in January before December 31 — Section 179 applies in the purchase year. Prepay January's business software subscriptions. Max out your SEP-IRA or Solo 401(k) contribution. Each of these moves taxable income from a high-tax year to a future lower-tax year.

Education and professional development expenses qualify when they maintain or improve skills required in your current business. Some states also offer a tax credit for hiring or training employees, which stacks on top of the federal deduction. A bookkeeper taking an accounting course deducts it. A plumber taking a real estate licensing course does not — that's a new career, not the current one.

Software and subscriptions are fully deductible business expenses when used for business. Accounting software, project management tools, cloud storage, email marketing platforms — all deductible. Keep business subscriptions separate from personal ones, or document the business-use percentage.

Business loans and interest: interest paid on a business loan or a business credit card is deductible in the year paid. The principal is not — only the interest. If you borrowed to grow your business, that interest belongs on your tax return. ProTax USA reviews these deductions with every small business tax client. A tax professional who knows your numbers can find write-offs you'd miss filing alone. Book a call before tax season hits and you're rushing to file.