Top Tax Deductions for Home-Based Business Owners

Running a business from home has real tax advantages — if you know what to claim. Here are the top deductions available to home-based business owners.

Deduct a portion of your home expenses based on the percentage of your home used exclusively for business. Use the simplified method ($5/sq ft, up to 300 sq ft) or the actual expense method for a potentially larger deduction.

The business-use portion of your internet and cell phone bills is deductible. If you use your phone 70% for business, deduct 70% of the bill.

Computers, printers, monitors, desks, chairs, paper, ink — all deductible if used for business. Equipment may be fully deducted in the year of purchase under Section 179.

QuickBooks, Microsoft 365, Zoom, project management tools, design software — all deductible as business expenses.

Books, courses, webinars, and certifications related to your business are fully deductible.

Website hosting, domain registration, social media ads, business cards, and any other marketing costs are deductible.

Fees paid to accountants, bookkeepers, attorneys, and consultants are fully deductible.

Self-employed individuals can deduct 100% of health insurance premiums for themselves and their families — as an above-the-line deduction, even if you don't itemize.

Contributions to a SEP-IRA, SIMPLE IRA, or Solo 401(k) reduce your taxable income dollar-for-dollar.

50% of the cost of business meals (with clients, partners, or employees) is deductible. Keep records of who you met with and the business purpose.

Every deduction requires documentation. Keep receipts, bank statements, and records of the business purpose for each expense. Digital records are fine — use a receipt scanning app or QuickBooks Online's receipt capture feature.

Want to make sure you're claiming every deduction you're entitled to? The Gap ProAdvisors prepares tax returns for self-employed individuals and small businesses nationwide. Contact us or pay for your tax prep online.