Every dollar counts when you’re running a small business. That’s why knowing the tax deductions for small businesses in 2025 can make a real difference. Dedications lower your taxable income, meaning you keep more of your hard-earned money. At Dreis Accounting Services, we help you find every possible savings.
A small business deduction is a cost that’s “ordinary and necessary” for your business. If you spend money to run or grow your business, chances are it could be deductible.
Here are some common examples:
The key is to keep proof. Receipts, logs, and invoices are a must if the IRS ever asks.
Let’s break down some of the most helpful federal small business deductions you can use this year:
Work from home? Deduct a portion of your rent, mortgage, utilities, and even cleaning.
You can deduct 50% of meals with clients or during travel—just keep a receipt and jot down the business purpose.
If you use your car for business, deduct mileage or actual expenses (gas, repairs, insurance).
Pens, paper, software, computers; if it’s for business, it’s likely deductible.
Paid a freelancer or contractor? That cost counts too.
Liability, workers’ comp, or property coverage can be written off.
SEP IRAs or solo 401(k)s let you save for the future and reduce taxes now.
These deductions add up and directly lower what you owe the IRS.
If your business is in Washington, don’t miss these Washington small business tax deductions:
Some small businesses may qualify for Business and Occupation (B&O) tax exemptions or reduced rates, depending on revenue or industry.
If you paid sales tax on certain items, you might qualify for use tax deductions or sales tax deferrals.
If you’re a sole proprietor with a lower income, this credit may reduce your overall state tax bill.
Washington doesn’t charge personal income tax, but business owners still face B&O and sales tax, so take every chance to reduce them.
To claim deductions, you need records. The best way to do this? Track as you go.
Here are simple ways to track business expenses:
Keep everything sorted by category (like meals, travel, or supplies). Come tax time, you’ll thank yourself.
Tools like QuickBooks for small businesses make it easy to track expenses and prepare for tax season. Here’s how:
QuickBooks can even calculate estimated taxes and help avoid surprises. It’s one of the best ways to stay organized year-round.
Not all deductions are handled correctly. Here are the most common deduction mistakes small business owners make:
Without proof, the IRS may deny your claim.
Don’t write off personal meals or vacations. Keep things separate.
If you use software and your accountant, be sure nothing is listed twice.
Only deduct what you can prove and explain.
Old or missing info makes tax prep harder and more stressful.
The fix? Keep receipts, label every transaction, and review your deductions monthly.
Sometimes, doing it yourself doesn’t cut it. So when should you get tax help for small business?
A professional can find more savings, prevent mistakes, and deal with the IRS so you don’t have to.
At Dreis Accounting Services, we make sure you don’t miss a single deduction. Here’s what we do:
Our clients in Washington trust us to handle the numbers, so they can focus on running their business.
Tax deductions aren’t just about saving a few bucks; they help your business grow. Knowing the tax deductions for small businesses in 2025 can lower your tax bill and boost your bottom line. Use smart tools, keep solid records, and get expert help when needed. If you’re in Washington and want peace of mind, Dreis Accounting Services is here to help you every step of the way
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