5 Most Overlooked Tax Deductions for Small Businesses (And How to Stop Leaving Money on the Table)
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If you’re a small business owner, freelancer, or entrepreneur, there’s a good chance you’re paying more in taxes than you need to. Not because you’re careless. Not because you’re doing anything wrong. But because many of the most valuable deductions are the easiest to overlook.
Most tax advice online focuses on the obvious. Home office. Mileage. Meals. Those matter, but they’re not where most business owners lose money.
The real issue is this: deductions don’t get missed loudly. They get missed quietly, a few hundred dollars here, a few thousand there, until it adds up to real money left with the IRS.
Below are five of the most commonly overlooked tax deductions for small businesses, plus what to do to make sure they’re properly captured and documented.
1. Software, Apps, and Subscriptions You Forgot You’re Paying For
Modern businesses run on tools. And almost all of them are deductible.
This includes:
Accounting software like QuickBooks or Wave
Scheduling tools
CRM systems
Email marketing platforms
Design tools
AI tools and automation software
Cloud storage and collaboration apps
If the software helps you operate, market, manage, or grow your business, it’s generally a legitimate business expense.
Why this gets missed:
These charges are often small, recurring, and spread across multiple platforms. When books aren’t reviewed monthly, subscriptions blend into the background.
What to do:
Review bank and credit card statements line by line. Identify recurring charges and confirm which ones are business-related. Keep invoices or receipts when available and make sure they’re categorized correctly in your books.
2. Education, Training, and Skill Development
Many business owners invest in themselves without realizing those costs can often be deducted.
This may include:
Online courses
Certifications
Workshops and seminars
Industry conferences
Professional development programs
If the education maintains or improves skills related to your current business, it can typically be deducted.
Why this gets missed:
People assume education only counts if it’s “formal” or tied to a degree. That’s not how the IRS looks at it for businesses.
What to do:
Document the business purpose of the education. Keep receipts, confirmation emails, and notes on how the training relates to your business activities.
3. Bank Fees and Payment Processing Costs
This is one of the most consistently missed deductions.
Deductible costs often include:
Monthly business bank account fees
Wire or ACH fees
Credit card processing fees (Stripe, Square, PayPal, etc.)
Merchant service charges
These expenses may not feel significant individually, but over a year they can add up to thousands of dollars.
Why this gets missed:
They’re embedded in statements and rarely tracked intentionally.
What to do:
Make sure bank and merchant fees are broken out and categorized properly instead of being lumped into generic expense categories or ignored entirely.
4. Business Use of Phone and Internet Services
If you use your phone and internet for business, a portion of those costs is likely deductible.
This can include:
Monthly phone service
Internet service
Data plans
You don’t need perfection. You need a reasonable business-use percentage that reflects reality.
Why this gets missed:
Business owners either assume it’s all personal or fear claiming it incorrectly, so they claim nothing at all.
What to do:
Estimate a reasonable percentage based on actual usage. Apply that consistently and document your method.
5. Professional Services You Already Paid For
Many business owners pay for expertise and forget that it’s deductible.
This often includes:
Accounting and bookkeeping services
Tax preparation and tax strategy
Business consultants or coaches
Legal services related to the business
These are not personal expenses when tied to the operation or growth of your business.
This often includes:
Accounting and bookkeeping services
Tax preparation and tax strategy
Business consultants or coaches
Legal services related to the business
These are not personal expenses when tied to the operation or growth of your business.
Why this gets missed:
People focus on revenue and overlook expenses that don’t feel “operational” like supplies or inventory.
What to do:
Ensure invoices from professionals are saved and categorized properly. If the service was business-related, it should be reflected in your books.
Why These Deductions Get Missed (And Why That Matters)
Most missed deductions aren’t the result of negligence. They’re the result of:
Mixed personal and business finances
Inconsistent bookkeeping
Waiting until tax season to look at numbers
Relying on generic advice instead of personalized strategy
The cost isn’t just higher taxes. It’s uncertainty. It’s second-guessing. It’s feeling like you’re working hard but not keeping enough.
The Real Takeaway
The goal isn’t to deduct everything.
The goal is to deduct what applies to your business, correctly and confidently.
Every business is different. What works for one owner may not work for another. That’s why strategy matters more than copying lists from the internet.
If you’re not sure which deductions apply to you, that’s normal.
If you want personalized guidance, clarity, and a plan that actually fits your business, schedule a free consultation or a tax strategy session and let’s walk through it together.
You don’t need to guess. You just need the right system and support.
