Tax Strategy · Section E
Five deductions most entrepreneurs miss.
The five line items that quietly cost most business owners thousands every year — and the one-paragraph fix for each.
The truth is — most entrepreneurs don't lose money to bad accounting. They lose it to questions they didn't know to ask. A CPA can only deduct what you tell them about. If something never makes it into the conversation, it never makes it onto the return.
Here are five deductions that come up over and over again with the people we work with — and the simple fix for each.
I. Home office (done correctly)
The home office deduction has a reputation as audit bait. It isn't — when you take it correctly. The IRS standard is regular and exclusive use of a defined space for your business. Measure the square footage, document the use, and apply either the simplified method ($5/sq ft up to 300 sq ft) or actual expenses (utilities, insurance, depreciation, etc.). The actual-expense method usually wins for a serious office.
II. Vehicle — but with mileage tracked
Most owners deduct vehicles. Few track mileage well enough to maximize the deduction OR survive an audit. Use a mileage app (MileIQ, Everlance, or similar) and let it run in the background. Compare actual expenses vs. the standard mileage rate every January and pick whichever is bigger. Many owners leave thousands on the table by defaulting to the wrong method.
III. Health insurance for self-employed owners
If you're self-employed and pay your own health premiums, those premiums are deductible above the line — meaning they reduce your AGI even if you don't itemize. Sole props deduct on Schedule 1; S-corp owners route premiums through the business. The structure matters; the deduction shouldn't be missed either way.
IV. Retirement contributions, customized
Solo 401(k), SEP-IRA, defined benefit plans — different vehicles, dramatically different contribution limits. A solo 401(k) lets you contribute as both employee AND employer. A SEP is simpler but caps lower at high incomes. A defined benefit plan can shelter six figures for the right age and income profile. Most owners default to whatever their payroll provider offers. The wrong default can cost tens of thousands a year.
V. The qualified business income (QBI) deduction
The 20% QBI deduction (Section 199A) is one of the most generous breaks in the modern tax code, and it's stuffed with phase-outs, thresholds, and "specified service trade or business" exclusions. Most owners qualify for some piece of it. Many leave money on the table because their structure or wage strategy disqualifies them from the full benefit. This is exactly the kind of question to bring to your CPA in November — not after the year closes.
Five deductions, five conversations to have. The full Unlock Hidden Deductions guide goes deeper on each — plus the rest of the list. Free, no spam, yours for an email.