Smart Tax Strategies for Savvy Business Owners

Tax planning might not be the flashiest part of being a successful entrepreneur, but it’s definitely one of the smartest. Because getting the right strategies in place could be the difference between keeping more of your money or watching it vanish into the bottomless pit of taxes. Best of all, you don’t have to obsess over every cent. Just a few smart moves tailored to your needs can keep more cash right where it should be—in your bank account.

So what are these smart moves? They involve (just a little) planning ahead, being strategic, and making the most of every legitimate deduction available to you. It’s more about changing the way you think about taxes. Because iIt’s not just about saving a few bucks here and there – it’s about keeping more of your money so you can reinvest it back into your business and watch it grow. That’s how building wealth multiplies fast.

Our research team has put together a downloadable checklist of all the tax deductions you might be missing out on. There are a lot of them, and they are a great starting point to start your own tax planning.. But before we dive into that, let’s talk about some smart strategies you can start using right now to ensure you’re not leaving any money on the table.

The Smart Approach to "Changing the Facts"

The biggest win many of our clients find is realizing you can turn some of your personal expenses into legitimate business deductions by simply “changing the facts.” This isn’t about fudging the numbers (never do that!). It’s about finding ways to use your personal purchases for your business.

Let’s say you take your spouse out to dinner. Not deductible, right? Well —  let’s say you discuss some important business matters, pricing strategies or marketing ideas. Guess what? That dinner is now a deductible business expense. All you have to do is write down who you were with and what you discussed on the back of the receipt. Take a quick photo and send it to your CPA or bookkeeper. Boom – you just turned a night out into a tax write-off.

The same goes for things like subscription services. Maybe you have a Spotify account that you use to listen to music while you work. Well, if you start using it to listen to business podcasts or to play background music in your office, suddenly it becomes a deductible business expense.

Starting to make sense? It’s all about getting creative and finding ways to use the things you’re already buying for your business. And the best part? It’s totally legit, as long as you keep good records and can prove the business use. So start thinking outside the box and look at your expenses with a fresh perspective. Of course, you’ll want to discuss all this with your tax professional to make sure you are following all the rules and they are on board.

Strategic Deduction Examples

Let’s dive into some real-world examples of how you can turn everyday expenses into legitimate business deductions. These are the kinds of strategies that the big shots use, but they work just as well for small business owners like us.

Dining and Entertainment

In addition to the example with your spouse, be sure to save receipts for all meals and entertainment that you pay for with clients, customers or employees. Rules change periodically, but making sure you have a good paper trail and documentation is the first key step.

Subscription Services

We talked about changing the facts on your Spotify account. The same goes for other subscription services like Netflix or Amazon Prime. If you can find a legitimate business use for them, you can write them off.

Travel Expenses

Now, here’s where things get really interesting. Did you know that you can actually deduct a portion of your family vacation if you add a business component to it? It’s true! If you schedule some client meetings or have a family business retreat where you discuss business roles and strategies, you can potentially write off a big chunk of your travel expenses. It takes careful documentation, but it can lead to significant deductions.

The point is, there are ways to get creative with your deductions and save some serious cash. You just have to know where to look and how to do it right. And that’s where having a solid tax plan comes in handy.

Commonly Overlooked Deductions That Can Save You Money

Even better than finding new deductions is realizing you’ve been missing out on some all along. Here are a few that many small business owners overlook.

Home Office Deductions

If you work from home, listen up. You might be able to deduct a portion of your rent, utilities, and other expenses related to your home office. The key is to have a dedicated space that you use exclusively for business. That means no using the dining room table as your desk during the day and then eating dinner there at night. But if you have a legit home office, you could be saving a bundle on your taxes.

Professional Development

Investing in yourself is always a smart move, but did you know that it can also be a tax deduction? If you take courses or attend workshops to improve your skills or knowledge related to your business, you can write off those expenses. Our Wealth Factory clients are able to write off all the educational and program expenses they pay to us. That means they get financially smarter and save money at the same time. It’s a win-win!

Health Insurance Premiums

If you’re self-employed and paying for your own health insurance, you might be able to deduct your premiums on your taxes. This can be a huge saving, especially if you’re paying a lot for coverage. Just make sure you’re following all the rules and regulations around this deduction.

Technology and Equipment

In today’s digital world, it’s hard to run a business without some serious tech. But guess what? You can write off the cost of your business-related technology and software, even if you use it for personal stuff too. The key is to keep track of how much you use it for business versus personal and allocate the costs accordingly.

So, take a closer look at your expenses this year. Are you taking advantage of all the deductions available to you? If not, it’s time to start. Trust me, your bank account will thank you.

Compliance and Best Practices

Now, before you start writing off every dinner and vacation, let’s talk compliance. If you’re going to take these deductions, you need to follow the rules and keep meticulous records. We’re talking receipts, invoices, mileage logs – the whole shebang.

Why? Because if the IRS comes knocking (and statistically speaking it WILL happen to you at least once), you need proof that your deductions are legit. If you can’t show that cool underwater camera you bought was for business purposes, you could be in hot water.

The best way to stay compliant is to keep detailed records. Every time you make a purchase or take a trip you plan to write off, keep track of it. Jot notes on receipts, log your mileage, and snap photos of anything related to the expense. If you’re unsure of anything, document and then make a note and discuss it with your CPA or tax team at one of your quarterly or semi-annual meetings (highly recommended to schedule these outside the Jan-April “busy season”).

Just remember, taking a deduction doesn’t always mean you should. Taxes have a lot of gray areas, and it’s easy to get in over your head. That’s why we always recommend consulting with a tax professional before claiming any major deductions. They can help you navigate the tax code and stay on the right side of the law. Plus, they might even uncover additional deductions you hadn’t considered.

The Bottom Line

Look, you don’t have to become a tax expert to do this. The key is to start thinking strategically about your deductions and making tax planning a year-round process. If you want to keep more of your hard-earned money, you need to be proactive. Stay organized, keep good records, and always be on the lookout for ways to maximize your deductions.

The good news? It doesn’t have to be complicated. By implementing just a few of the strategies we’ve covered, you can start saving money on your taxes right away. And the more you do it, the easier it becomes.

Your first step? 

Download the Ultimate Tax Deduction Checklist Now

Print it out if you want. Hang it in your office, and start checking things off as you go. But don’t stop there. Schedule a meeting with your tax pro and review the checklist together. They can help you identify even more deductions and ensure you’re taking advantage of every available saving.

Most importantly, don’t be afraid to get creative. Remember, it’s about “changing the facts” and finding ways to use personal expenses for your business. The more you do it, the more money you’ll save.

Next Steps

If you don’t have a tax team that knows how to bring these tax strategies to life for you, you may want to see if working with our team makes sense. Our tax professionals deal with these strategies every day for our clients.

The application is simple and there’s no obligation. If it looks like a good fit, you can schedule a discovery call with one of our Wealth Strategists to talk through the process.

Either way, saving on taxes is as American as apple pie, and the tax code is written to incentivize entrepreneurs and small business owners like you. So make sure you’re taking full advantage and keeping more money in your pocket, where it belongs.



# Description
1 Acupuncture.
2 Alcoholism treatment at an inpatient facility or transportation costs to and from doctor-recommended Alcoholics Anonymous meetings.
3 Ambulance rides.
4 Bandages or similar medical supplies.
5 Birth control medication.
6 Body scans.
7 Braille reading materials. You can deduct the difference between the cost of Braille books or magazines and the cost of non-Braille versions of the same publications.
8 Breast pumps.
9 Breast reconstruction surgery following a mastectomy.
10 Chiropractor visits.
11 Contact lenses.
12 Crutches.
13 Dental services, except for teeth whitening.
14 Dentures.
15 Diabetic supplies.
16 Diagnostic devices.
17 Disabled dependent care.
18 Drug addiction treatment at an inpatient facility.
19 Eye exams.
20 Eyeglasses.
21 Eye surgery to correct defective vision.
22 Fertility procedures or surgeries.
23 Founder’s fees used to prepay medical treatment in a nursing home.
24 Guide dogs, including all expenses to feed and care for them.
25 Health institute treatments prescribed by a doctor.
26 Health insurance premiums, including HMOs or Medicare, as long as you pay the premiums yourself. It does not include life insurance or insurance that covers the loss of income due to a medical condition.
27 Hearing aids, including repairs or maintenance (such as new batteries).
28 Hearing-impaired telephone or television equipment, including repairs.
29 Home improvements or renovations designed to accommodate a medical condition. You can deduct the cost of the improvements minus the amount that they increase the home’s value. You can also deduct the cost of maintaining those improvements after they are built.
30 Hospital stays.
31 Laboratory fees.
32 Lead-based paint removal, if it is for the benefit of a child with lead poisoning. The application of new paint is not included.
33 Legal fees needed to authorize mental illness treatments.
34 Lodging required for medical care away from home (up to $50 per person, per night).
35 Long-term care.
36 Meals during any stay at a medical facility.
37 Medical conferences.
38 Nursing homes.
39 Nursing services.
40 Organ donation.
41 Osteopathic care.
42 Oxygen.
43 Physicals.
44 Pregnancy tests.
45 Prescription drugs.
46 Prosthetic limbs.
47 Psychiatric care.
48 Psychoanalysis.
49 Psychologist visits.
50 Special education schooling or tutoring that is recommended by a doctor.
51 Sterilization.
52 Stop-smoking programs, except for over-the-counter medicines.
53 Surgeries, as long as they are not unnecessary cosmetic surgery.
54 Therapy.
55 Transportation that is necessary for medical care. This includes the cost of modifying a vehicle to accommodate a medical condition, or the additional cost of a wheelchair-accessible vehicle over the cost of a regular vehicle. It also includes transportation costs to and from medical treatments, such as public transportation fares, fuel costs, tolls and parking.
56 Vasectomies.
57 Weight-loss programs that are prescribed by a doctor to treat obesity or related diseases. Food expenses are generally not included.
58 Wheelchairs.
59 Wigs that are recommended by a doctor to treat the mental health of someone with disease-related hair loss.
60 X-rays.


# Description
61 Accounting fees.
62 Amortized bond premiums. The premium needed to buy a bond that produces taxable interest can be deducted on an amortized basis, meaning that part of the premium is deductible each year that you own the bond.
63 Attorney fees.
64 Bank charges for automatic investment services.
65 Clerical help.
66 Dividend reinvestment plan service charges.
67 Income collection fees.
68 Indemnity bond premiums.
69 Investment advisor fees.
70 Investment expenses from pass-through entities. Your share of investment expenses from an S-corporation, real estate mortgage investment conduit or other partnership can be deducted from your personal income taxes.
71 Investment-related interest expenses.
72 Office rent.
73 Safe deposit box rent.
74 Software or online services used to manage investments.
75 Subscriptions to publications that provide investment advice.
76 Trustee’s commissions.


# Description
77 Mortgage interest payments.
78 Mortgage points. Points are prepaid interest, and must be amortized, with just a portion of the original prepaid expense being deducted each year of the mortgage.
79 Late charges on mortgage payments.
80 Penalties charged for repaying a mortgage early.
81 Ground rent, as long as it is redeemable and meets certain other qualifications.
82 Cooperative apartment loan interest. A loan used to buy into a cooperative housing corporation is essentially considered a mortgage.
83 Your share of a cooperative housing corporation’s deductible mortgage expenses.


# Description
84 Tuition and fees. Up to $4,000 of your tuition and fees expenses can be deducted.
85 Student loan interest. You can deduct up to $2,500 of interest paid on student loans.
86 Tuition.
87 Books.
88 Supplies.
89 Lab fees.
90 Transportation costs of getting from work to school, or between school and home.
91 Lodging, if you have to travel overnight for educational purposes.
92 Meals. You can deduct 50 percent of the cost of meals during such overnight trips.


# Description
93 Monetary donations.
94 Donations of property. You can deduct the fair market value of any items you donate.
95 Charitable purchases. If you pay a charitable organization and receive something in return, you can deduct the amount you paid minus the fair market value of what you received.
96 Membership fees. You can likewise deduct the fees or dues required for membership in a charitable organization, minus the value of any membership benefits you receive.
97 Volunteer expenses. You can deduct unreimbursed expenses you incur while performing services as a volunteer for a qualified charitable organization.
98 Travel expenses. You can deduct travel expenses, including transportation, lodging, and meals, incurred while performing services as a volunteer.
99 Uniforms. You can deduct the cost and upkeep of uniforms that you wear while performing volunteer work.
100 Expenses related to charitable events. If you attend a charitable event, such as a gala or fundraiser, you can deduct the cost of your ticket, as long as the cost exceeds the fair market value of any benefits you receive.


# Description
101 Daycare costs.
102 Nanny fees.
103 Preschool tuition.
104 Before and after school care.
105 Summer day camp costs. Overnight camps do not qualify.
106 Transportation costs associated with childcare. For example, the cost of driving your child to and from daycare may be deductible.
107 Costs for a housekeeper, cook, or cleaner if their services also include caring for your child.


# Description
108 Accounting costs.
109 Adoption expenses. These can include agency fees, legal fees, and court costs.
110 Amortizable bond premiums.
111 Appraisal fees.
112 Apprenticeship program costs.
113 Arbitration fees.
114 Armed forces reserves travel.
115 Bad debts.
116 Bank fees on IRAs.
117 Business car expenses, if not reimbursed by your employer.
118 Business liability insurance.
119 Business telephone expenses.
120 Casualty and theft losses. These include the loss or damage of your property due to sudden, unexpected, or unusual events such as fires, floods, thefts, storms, or car accidents.
121 Certain business use of your home.
122 Certain education expenses related to your job or business.
123 Certain job-hunting expenses.
124 Certain unreimbursed employee business expenses.
125 Certain unreimbursed partnership expenses.
126 Check-writing fees at your bank.
127 Childbirth classes.
128 Child care outside of day care.
129 Children’s sports or activities.
130 Church donations.
131 Civil defense and emergency preparedness supplies.
132 Civil defense and emergency preparedness training courses.
133 Civil rights attorney fees.
134 Civil service examination fees.
135 Claiming a worthless security.
136 Coinsurance payments.
137 Commissions paid to secure a mortgage.
138 Commissions on the sale of property.
139 Commute to temporary work sites.
140 Community property laws.
141 Commuter transportation.
142 Compensation of court-appointed conservators, guardians, and trustees.
143 Compensatory damages awarded for physical injury or physical sickness.
144 Computers used for work or school.
145 Concierge fees at your hotel.
146 Concierge medical services.
147 Conservation easements.
148 Cost of defense in a legal dispute over your job.
149 Cost of removing lead-based paint.
150 Cost of replacing short-term cell phones used for work.
151 Cost of tax preparation software.
152 Cost of telephones that you need for your business (landline or cell).
153 Costs of a business-related course.
154 Costs of uniforms and costumes, if they are not suitable for everyday wear and you can’t wear them away from work.
155 Costs of your own services or of payments to relatives or dependents for work they do in your business.
156 Costs related to property held for investment, such as management and maintenance fees, and property taxes.
157 Court costs to collect taxable income.
158 Credit reports and monitoring services.
159 Criminal defense fees.
160 Cultural or sporting event tickets.
161 Damage deposits you forfeited.
162 Daycare or babysitting costs while you’re at work or looking for work.
163 Deaf interpreter costs.
164 Debt collection fees.
165 Delivery fees.
166 Depreciation on home computers or home office equipment.
167 Depreciation on rental property improvements.
168 Depreciation on a car used for business or work-related travel.
169 Depreciation on business equipment.
170 Depreciation on a cell phone or other telecommunications device used for work.
171 Depreciation on a home used for business or work.
172 Depreciation on a rental property.
173 Depreciation on a car used for charity work.
174 Depreciation on a car used for medical travel.
175 Depreciation on a car used for moving.
176 Depreciation on a car used for school or teacher-related travel.
177 Depreciation on a car used for work-related travel.
178 Depreciation on a work uniform.
179 Depreciation on a cell phone used for work.
180 Depreciation on office furniture.
181 Depreciation on a rental car.
182 Depreciation on rental property.
183 Depreciation on business-related property.
184 Depreciation on a computer used for work.
185 Depreciation on a home office computer.
186 Depreciation on a work uniform.
187 Depreciation on a cell phone used for business.
188 Depreciation on office equipment.
189 Depreciation on a rental car used for business or work-related travel.
190 Depreciation on business equipment.
191 Depreciation on a rental property.
192 Depreciation on a vehicle used for charity work.
193 Depreciation on a vehicle used for medical travel.
194 Depreciation on a vehicle used for moving.
195 Depreciation on a vehicle used for school or teacher-related travel.
196 Depreciation on a vehicle used for work-related travel.
197 Depreciation on work equipment.
198 Depreciation on a vehicle used for business or work-related travel.
199 Depreciation on equipment.
200 Depreciation on a rental vehicle.
201 Depreciation on rental property improvements.
202 Depreciation on business equipment.
203 Depreciation on a vehicle used for charity work.
204 Depreciation on a vehicle used for medical travel.
205 Depreciation on a vehicle used for moving.
206 Depreciation on a vehicle used for school or teacher-related travel.
207 Depreciation on a vehicle used for work-related travel.
208 Depreciation on a vehicle used for business or work-related travel.
209 Depreciation on equipment used for business.
210 Depreciation on a rental vehicle.
211 Depreciation on rental property improvements.
212 Depreciation on business equipment.
213 Depreciation on a vehicle used for charity work.
214 Depreciation on a vehicle used for medical travel.
215 Depreciation on a vehicle used for moving.
216 Depreciation on a vehicle used for school or teacher-related travel.
217 Depreciation on a vehicle used for work-related travel.
218 Depreciation on a vehicle used for business or work-related travel.



# Description
222 Raw materials costs.
223 Finished products costs.
224 Transportation costs.
225 Utilities costs.
226 Supplies costs.
227 Labor costs involved in creating the products.


# Description
228 Wages.
229 Bonuses.
230 Benefits.
231 Retirement plan contributions.
232 Property transfers, such as company stock.
233 Sick pay.
234 Vacation pay.
235 Reimbursements.
236 Expense allowances.
237 Employee educational assistance program payments.
238 Awards, as long as they meet certain qualifications.


# Description
239 Employee medical insurance.
240 Employee life insurance.
241 Worker’s compensation insurance.
242 Vehicle insurance.
243 Flood, fire, storm, theft, accident, or other casualty insurance.
244 Bad debt or credit insurance.
245 Liability insurance.
246 Malpractice insurance.
247 Overhead insurance that covers business expenses in case of long illness or disability.
248 Business interruption insurance that covers lost profits if the business is temporarily shut down (but not due to illness or disability).
249 Self-employment health insurance.


# Description
250 Mortgage interest.
251 Prepayment penalties.
252 Employment tax interest, which is charged when you owe employment taxes.
253 Original issue discounts (OID) are a form of deductible interest.
254 Installment purchase interest.


# Description
255 State, local, or foreign income taxes.
256 Real estate taxes.
257 Employment taxes.
258 State unemployment fund taxes.
259 Excise taxes.
260 Franchise taxes.
261 Occupational taxes.
262 Personal property taxes, if the personal property is used for business.
263 Self-employment taxes.
264 Sales taxes. Sales taxes are usually not deducted separately, but are included in the deductible cost of goods sold or the deductible cost of other purchased items.


# Description
265 Start-up costs.
266 Research and experimental costs.
267 Investigative costs related to researching the potential purchase of an existing business.
268 The cost of organizing a corporation or partnership.
269 Lease acquisition costs.
270 Reforestation costs.
271 Oil and gas exploration costs.
272 Pollution control facilities.
273 Depletion of mineral properties.
274 Land.
275 Buildings.
276 Machinery.
277 Motor vehicles.
278 Furniture.
279 Improvements.
280 Franchise rights.
281 Goodwill.
282 The value of being a going concern.
283 The value of having a trained workforce in place.
284 Information-based intangibles, such as the value of business records.
285 Customer-based intangibles, such as the value of existing customer relationships.
286 Supplier-based intangibles, such as favorable relationships with distributors.
287 Existing licenses or permits.
288 Non-compete agreements.
289 Patents.
290 Copyrights.
291 Trademarks.


# Description
292 Accounting fees.
293 Advertising.
294 Association membership dues.
295 Banking fees.
296 Bad debt write-offs.
297 Car and truck expenses.
298 Charitable donations.
299 Collection expenses.
300 Commissions to non-employees.
301 Conventions.
302 Credit card convenience fees.
303 Gifts to customers.
304 Entertainment.
305 Franchise fees.
306 Fuel.
307 Internet service.
308 Interview expense allowances.
309 Legal fees.
310 Lodging.
311 Meals.
312 Maintenance.
313 Moving machinery.
314 Office supplies.
315 Outplacement services.
316 Outsourced services.
317 Rent.
318 Repairs.
319 Parking.
320 Penalties and fines.
321 Prizes for contests.
322 Postage.
323 Shipping.
324 Software.
325 Tax preparation fees.
326 Telephone.
327 Theft losses.
328 Tips.
329 Tools.
330 Tolls.
331 Trade shows.
332 Travel.
333 Web hosting.


The Earned Income Tax Credit (or EITC) is available to people who earned income during the year, but whose income does not exceed a certain threshold. The maximum income level, and the amount of the credit, varies depending on your marital status and the number of children you have. 


# Description
1 Child tax credits: Up to $1,000 per child can be credited.
2 Child and dependent care credits: If you pay someone to care for a child or an adult dependent with special needs, you can claim a percentage of those expenses (subject to certain limits) as a tax credit.
3 Adoption credits: If you adopt a child, you can get a tax credit for qualified adoption expenses.


You can claim either an educational credit or an educational deduction for each student; you cannot claim both the credit and the deduction. There are two educational credits available:

# Description
1 American opportunity credit: This covers the first four years of undergraduate school and is worth up to $2,500 per student.
2 American opportunity credit: This covers the first four years of undergraduate school and is worth up to $2,500 per student.


If your income falls below a certain threshold, you can claim a tax credit for being: 

# Description
1 Over age 65.
2 Under age 65, but permanently disabled.


Up to 50 percent of contributions to certain types of retirement accounts, such as an IRA or 401(k), can be claimed as a tax credit.


If you have more than one employer, the combined amount withheld from your paychecks for Social Security tax may be more than what you are required to pay. Any excess amount that is withheld can be refunded via a tax credit.


Income tax paid to a foreign country can either be deducted or claimed as a tax credit.


If you upgrade your home with a renewable energy system, you can claim a tax credit worth 30 percent of the total cost of the system (including installation costs). These green energy credits include: 

Geothermal heat pumps, as long as they meet certain efficiency standards.
Wind turbines with a rated capacity of 100 kilowatts or less.
Solar water heaters, as long as the water is not used for outdoor hot tubs or pools.
Photovoltaic systems, or electricity-producing solar panels.
Hydrogen fuel cells. The credit for fuel cells is capped at $500 per 0.5 kilowatts of capacity.

Additionally, energy companies can earn tax credits for:

Producing electricity on a large scale from renewable sources.
Producing biodiesel.


You may also be able to claim tax credits for: 

Renovating historic buildings.
Building low-income apartments.
Hiring veterans, youths or other groups with high unemployment rates.
Buying a Qualified School Construction Bond (QSCB).
Producing refined coal.
Producing coal from a mine located on Native American tribal lands.
Employing members of a Native American tribe.
Keeping agricultural chemicals guarded and secure.
Developing “orphan” drugs that treat rare diseases (those that affect fewer than 200,000 people).
Capturing carbon dioxide and disposing of it underground.
Providing childcare facilities or services for employees.
Making your small business more accessible to people with disabilities.
Training miners to be part of a mine rescue team.
Paying Social Security and Medicare taxes on restaurant employees’ tips, if they exceed the minimum
Buying a qualifying plug-in electric vehicle.

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