If you own a small business or a startup, you want to keep more of your profits in order to support your family or pour back into your company. Tax deductions for small businesses in 2025 can lower your income tax bill and help you keep more of your earnings.
Learning about tax deductions for small businesses now can help you reap the benefits by the end of the tax year. You can talk to a financial advisor at Elevate Wealth Management to learn what deductions you’re eligible for. In the meantime, here are some of the top tax deductions for small businesses in 2025.
The Best Tax Deductions for Small Businesses in 2025
Many expenses that keep your business running can generate tax deductions or credits that reduce the taxes you pay on your profits. A key to taking advantage of those tax breaks is to create a plan and maintain good records to track them.
Consider these tax deductions for small businesses in 2025.
The Cost to Start Your Business
If you’re starting a new business in the new year, you can deduct the costs you incur to launch your company. You can deduct up to $5,000 in startup costs for the year you begin operations. Costs above that—up to $50,000—must be spread out (amortized) over the next 15 years.
Business Meals and Entertainment
You can deduct some types of entertainment, like company parties, along with up to 50% of the costs of food and drinks you purchase for business purposes. The expenses must be directly related to your company, and you must document the following:
- Date and time of the event
- The business relationship of those in attendance
- The total cost
Keep a receipt and write detailed notes about the outing on the back of the receipt. Consider consulting a tax professional about IRS limits on deducting entertainment expenses.
Work-Related Vehicle Use
If you use your vehicle exclusively for work, you can write off what you spend to maintain and operate it. If you also use it for personal errands, only the expenses related to your business can be deducted. You can claim your business mileage or use the standard mileage rate from the Internal Revenue Service, which is $0.70 per mile in 2025. (1)
Office Supplies and Equipment
Office supplies and equipment are some tax deductions for small businesses you shouldn’t overlook. Computers and work-related software, printers, paper, and pens used during the year they were purchased can be deducted. You also can write off postage and shipping expenses. File away your receipts to have them available at tax time.
Employee-Related Expenses
You can deduct certain employee-related expenses deemed reasonable and necessary, including:
- Salaries
- Vacation pay and sick time
- Health and retirement benefits
- Life insurance
- Education
- Meals and lodging
To claim these tax deductions for small businesses, you must comply with all employment laws and regulations.
Professional Services
As a small business owner, you know that professional services from financial advisors, attorneys, and accountants can help you build a successful company. The cost of professional services and fees for financial planning and consulting for business strategy can be deducted from your taxes. You must keep good records of the fees and services.
These are just a few of the tax deductions for small businesses available. You also can claim tax credits and deduct expenses related to marketing and advertising, home office space, utilities, business loan interest and bank fees, business insurance, and more.
Find a Financial Advisor on Tax Deductions for Small Businesses
Careful tax planning can help you take advantage of all the credits and deductions available to your company. At Elevate Wealth Management, we know that small business owners have questions, and we can be a guide.
Schedule an introductory meeting by reaching out to us at rob@elevateassest.com or 307.461.5550.
About Rob
Rob Johnson is a financial advisor at Elevate Wealth Management, an independent, fee-only wealth management firm serving young professionals, pre-retirees, and retirees in Sheridan, Wyoming, and surrounding areas.
With a passion for helping others achieve their goals, Rob is committed to working closely with clients to empower them to make the best financial decisions for their lives. Rob understands that every person faces unique circumstances when it comes to their financial future, so he will tailor his approach and recommendations to ensure clients feel confident about the direction they’re headed. Rob has an enthusiasm for customer service, which is apparent during every client interaction he has. Honesty and integrity are at the center of the advice and recommendations he gives, and he will work hard to build and maintain trust in every relationship.
Rob has a bachelor’s degree in economics and finance from Black Hills State University and is actively working toward his CERTIFIED FINANCIAL PLANNER®, CFP® designation. He is a Wyoming native who grew up at the foot of the Big Horn Mountains in beautiful Dayton, Wyoming. He believes strongly in giving back to the community that helped raise him by volunteering his time and serving as an active board member with various non-profit organizations in the area.
Rob and his wife Emma have two sons, Michael and Sammy, who are the lights of their lives. Rob has a passion for sports and is an avid golfer. During the warmer months of the year, there’s a good chance you’ll find him on the first tee. To learn more about Rob, connect with him on LinkedIn.
The views expressed represent the opinion of Frontier Asset Management. The views are subject to change and are not intended as a forecast or guarantee of future results. This material is for informational purposes only. It does not constitute investment advice and is not intended as an endorsement of any specific investment. Stated information is derived from proprietary and nonproprietary sources that have not been independently verified for accuracy or completeness. While Frontier Asset Management believes the information to be accurate and reliable, we do not claim or have responsibility for its completeness, accuracy, or reliability. The use of such sources does not constitute an endorsement. Frontier does not have an affiliation with any author, company or security noted within. Statements of future expectations, estimates, projections, and other forward-looking statements are based on available information and the Frontier Asset Management’s view as of the time of these statements. Accordingly, such statements are inherently speculative as they are based on assumptions that may involve known and unknown risks and uncertainties. Actual results, performance or events may differ materially from those expressed or implied in such statements. Investing in securities involves risks, including the potential loss of principal. Past performance is not indicative of future results.
Frontier does not provide tax advice. Please consult with a CPA for recommendations pertaining to individual circumstances.
Elevate is the financial planning division of Frontier Asset Management. Frontier Asset Management is a Registered Investment Adviser. The firm’s ADV Brochure and Form CRS are available at no charge by request at info@frontierasset.com or 307.673.5675 and are available on our website www.frontierasset.com. They include important disclosures and should be read carefully. 20250121.64444
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(1) Internal Revenue Service, Standard mileage rates, December 26, 2024