Small business owners often overpay on taxes simply because they don't know which deductions they qualify for. Here are commonly overlooked deductions that could reduce your tax bill significantly.
Home office deduction
If you use a dedicated space in your home exclusively for business, you can deduct a portion of your rent or mortgage, utilities, insurance, and repairs. The simplified method allows $5 per square foot, up to 300 square feet ($1,500 max). The regular method requires tracking actual expenses.
Vehicle expenses
If you use your car for business, you can deduct either actual expenses (gas, maintenance, insurance, depreciation) or use the standard mileage rate (67 cents per mile in 2026). Keep a mileage log — the IRS requires it for audit protection.
Health insurance premiums
Self-employed individuals can deduct 100% of health insurance premiums for themselves, their spouse, and dependents. This is an above-the-line deduction, meaning it reduces your adjusted gross income directly.
Retirement contributions
Contributions to a SEP-IRA, SIMPLE IRA, or Solo 401(k) are tax-deductible. A SEP-IRA allows contributions up to 25% of net self-employment income (max $69,000 in 2026). This reduces your current tax bill while building retirement savings.
Meridian offers business retirement accounts including SEP-IRAs and SIMPLE IRAs with $0 setup fees and competitive investment options.
Business meals
Business meals are 50% deductible when you're meeting with clients, prospects, or business contacts. Keep receipts and note who you met with and the business purpose. Team meals during business travel are also deductible.
Software and subscriptions
Business software, cloud services, and professional subscriptions are fully deductible. This includes accounting software, project management tools, design programs, and industry publications.