Lower your tax bill by claiming all the deductions you’re allowed.

Only thinking about expenses at the tax filing deadline could lead to missing out on allowable deductions. Here are five deductions sometimes overlooked by sole proprietors, freelancers and small business owners.

Start-up costs incurred before the business opened

The IRS allows deductions for expenditures made while creating a business or investigating the creation or acquisition of one. This can include analysis or survey of potential markets, grand opening advertising, travel and other necessary costs for securing prospective distributors, suppliers, or customers fees consultants and professional services and more.

Phone and internet

A lot of us use personal smartphones and internet service to run our businesses. You can deduct part of these expenses. For example, if 60% of your phone and internet use is for work, you can claim 60% of the costs as a business expense. The proportion of personal/business use will vary by person.

Mileage

Even if you don’t have company car and work from a home office, it’s likely that you occasionally drive your personal car for businesses purposes. That trip to get printer ink or driving across town to meet a client? The mileage is deductible. The standard deduction is 67 cents per mile in 2024. Keep records of all business trips so you can tally the miles at the year’s end and take a deduction.

Business meals

When it’s necessary to hold a business meeting over a meal at a restaurant you can deduct 50% of reasonable costs. (Note: The IRS will not allow a deduction for lavish or extravagant meals). To take the meal deduction, maintain good records that include the receipt, date, location, who you met with and the name of their business and notes on the business you discussed.

Bank fees and interest paid

Any banking charges—from monthly fees and credit card transaction fees to interest paid on business credit cards, is tax deductible.

If you’re unsure if a business expense is tax deductible check IRS.gov or consult with a tax preparer, accountant or tax attorney.

 

Federally insured by NCUA