Almost everything you spend to run your business is deductible. The challenge isn’t knowing what counts. It’s tracking it properly and keeping documentation that survives an audit.

Operating expenses are the easiest category. Rent, utilities, internet, phone service, office supplies, software subscriptions. If you’re paying for something because your business needs it to function, it’s deductible. This includes professional services like accounting, legal fees, and consulting.

Vehicle expenses matter for most small businesses. You can use actual expenses or the standard mileage rate. Either way, you need a log of business miles. Driving to meet clients, pick up supplies, or visit job sites counts. Commuting from home to your regular office doesn’t.

Home office deduction applies if you have a dedicated space used exclusively for business. The simplified method gives you $5 per square foot up to 300 square feet. The actual expense method can save more but requires calculating the percentage of your home used for business and applying it to rent, utilities, insurance, and repairs.

Equipment and furniture get deducted, though timing varies. Smaller purchases under $2,500 can be expensed immediately. Larger items either depreciate over time or you can use Section 179 to deduct the full amount in the year you buy it. Computers, furniture, tools, and machinery all fall into this category.

Insurance premiums are fully deductible. General liability, professional liability, commercial property, workers’ comp if you have employees. Health insurance for yourself is deductible if you’re self-employed, though it’s handled differently than other business expenses.

Marketing and advertising costs are deductible. Your website, online ads, print materials, signage, promotional items. Sponsoring a local youth sports team counts if you’re getting advertising exposure. A Phoenix area bookkeeper can help you categorize these correctly so nothing gets missed.

Travel for business is deductible when you’re away from home overnight. Flights, hotels, rental cars, meals while traveling. Local transportation to meet clients or attend business events counts too. Keep receipts and document the business purpose.

Meals with clients or business contacts are 50% deductible. The IRS wants to know who you met with and what you discussed, so write it on the receipt or log it somewhere.

Education and training related to your business is deductible. Courses, conferences, books, professional certifications. If it helps you do your job better or maintain a credential, you can write it off.

Interest on business loans and credit cards is deductible. So are bank fees, credit card processing fees, and the cost of accepting payments.

What’s not deductible includes fines and penalties, political contributions, personal expenses you’re running through the business, and federal income taxes. If you get audited, the IRS will look closely at anything that seems personal.

The deductions only work if you can prove them. Keep receipts. Use a separate business bank account and credit card. Categorize expenses correctly as you go instead of trying to remember what that $347 charge was at the end of the year. Good bookkeeping services catch these throughout the year instead of scrambling at tax time to reconstruct what happened.

Most small business owners miss deductions not because they don’t qualify but because they didn’t track them. A few hundred dollars in missed deductions every month adds up to thousands by year end. That’s real money you’re giving away.