Retirement plan contributions. Most self-employed people and small business owners either don’t have a retirement plan at all or contribute far less than they’re allowed.

A Solo 401(k) lets you contribute up to $69,000 per year in 2024 if you’re under 50. SEP IRAs allow contributions up to 25% of net self-employment income. These contributions reduce your taxable income dollar for dollar. A contractor in the 24% tax bracket who contributes $30,000 to a Solo 401(k) saves $7,200 in federal taxes that year.

The money goes somewhere regardless. Either you pay it to the IRS or you send it to your own retirement account where it grows for your future. Many business owners tell themselves they’ll set up a retirement plan next year. Then tax time arrives and they’re writing a check to the government when they could have kept that money working for themselves.

Beyond retirement, a few other deductions get missed regularly.

Home office deduction. If you use part of your home exclusively and regularly for business, you can take this deduction. The simplified method is $5 per square foot up to 300 square feet. Many skip it because they’ve heard it triggers audits. A legitimate home office with proper documentation is completely defensible. Working with a Phoenix area enrolled agent helps you understand what qualifies and how to document it properly.

Vehicle expenses. Whether you use the standard mileage rate or actual expenses, you need to track usage throughout the year. Business owners who wait until tax time to reconstruct their mileage typically underestimate and leave money on the table.

The pattern with overlooked deductions is they require planning or consistent tracking. Good tax preparation starts with capturing the right information all year instead of scrambling to find deductions in April.