21 Tax Deductions Small Businesses Need to Know

Working with your accountant or bookkeeper to track your small business tax expenditures and maximize your tax deductions is essential. Still, it’s helpful to know which write-offs to track.

The following are 21 small business tax deductions that are very commonly used. This is not an exhaustive list, but it's a pretty solid place to start.

Tax Deductions

The cost of goods sold is all the expense for making the product you sell. So if you sell t-shirts, for instance, the COGS would be all the expenses that make that t-shirt ready for sale.

1. Cost of Goods Sold

2. Vehicle Expenses  If you use a car, van, or light truck for your company, you can deduct the cost of using it for your business. 

You can write off taxes on labor, bonuses, commissions, and wages that you pay staff members. Additionally, you can write off certain benefits, such as retirement plan contributions.

3. Wages and Salaries 

4. Independent Contractor Labor 

Many small business owners hire freelancers or independent contractors. You must issue Form 1099-MISC if you paid more than $600 to a contractor during the tax year.

You can deduct the cost of office supplies and expenses. For example, you can write off disinfecting supplies if you run a nail salon. You can also write off tangible supplies such as a laptop or vacuum cleaner.

5. Supplies 

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