Whether you’re an independent creator or running a small business, every expense adds up—but so do the opportunities for tax savings. While tax deductions can significantly lower your taxable income and overall bill, many entrepreneurs and creators miss out on valuable write-offs simply because they don’t know about them.
In this article, we’ll highlight commonly missed tax deductions that could save you money and help you maximize your tax return, from home office expenses to purchasing invoice software for small businesses.
1. Home Office Deduction
If you work from home, you may be eligible to deduct expenses related to your home office. For creators, this can include the spaces you use for recording, editing, or creating digital content. To qualify, the space must be used exclusively for business purposes. You may be able to deduct:
- A portion of rent or mortgage interest
- Utilities such as electricity and internet
- Office supplies, furniture, and creative equipment
- Repairs and maintenance specific to your home office space
The IRS allows two methods for claiming this deduction: the simplified method, which uses a flat rate per square foot, and the actual expense method, which calculates deductions based on the percentage of your home used for business. See the IRS’s guide to deducting home office expenses for more information.
2. Business Mileage
Many business owners and creators forget to track and deduct their mileage for business-related travel. If you drive for client meetings, attend networking events, or pick up supplies, you might be eligible to claim:
- The standard mileage rate set by the IRS
- Actual expenses like gas, insurance, and maintenance
- Parking fees and tolls incurred for business purposes
Keeping a mileage log or using an app can help ensure you don’t miss out on this deduction. Remember that commuting from home to a regular place of business does not qualify.
3. Health Insurance Premiums
If you’re self-employed and pay for your own health insurance, you may be able to deduct your premiums. This applies to:
- Health, dental, and long-term care insurance
- Coverage for yourself, your spouse, and dependents
- Contributions to a health savings account (HSA)
This deduction is especially valuable because it can be claimed whether or not you itemize deductions. (Medical expenses not covered by insurance can also be tax deductible, but the deduction only applies if the expenses exceed a certain cost threshold and must be itemized.) For more information, check the IRS’s guidance on deducting medical expenses.
4. Professional Development and Education
For creators and small business owners looking to refine their skills, investing in education can be deductible. Potentially eligible expenses include:
- Online courses and training programs (such as for design, video editing, or business growth)
- Books and industry publications relevant to your field
- Seminars and workshops, including virtual conferences
- Membership fees for professional organizations
These deductions apply as long as the education maintains or improves your existing skills in your current business field.
5. Retirement Contributions
In addition to helping secure your future, a retirement plan can also come with significant tax benefits. Small business owners and creators are often able to deduct contributions to:
- SEP IRAs
- Solo 401(k)s
- SIMPLE IRAs
- Traditional IRAs
Maximizing contributions to these plans can significantly lower your taxable income while helping you build long-term financial security. Take care to note the specific deduction rules and contribution limits of each plan, as they can differ significantly.
6. Software and Subscriptions
Many creators and small businesses rely on various software tools to run their operations. Some common types of business software that you may be able to deduct the cost of include:
- Accounting and invoicing software
- Design, editing, and production programs like Adobe Creative Cloud
- Subscription-based business tools for marketing, content creation, or analytics
- Cloud storage services and productivity apps
Monthly and annual subscription costs are fully deductible if they are necessary for business operations and used only for business. Note that you may also be able to deduct the cost of computer hardware if you use it primarily or exclusively for business purposes.
7. Phone and Internet Expenses
Phone and internet services are essential for many small businesses and creators, but separating personal and business use is key to maximizing deductions. Business-related expenses can include:
- A dedicated business phone line or separate mobile plan used exclusively for work
- A portion of personal phone and internet costs allocated to business activities, based on documented usage
- High-speed internet plans necessary for uploading content, video conferencing, or maintaining an online business presence
- Business-related apps and data plans used for social media management, invoicing, or client communication
Maintaining clear records and using separate accounts for business and personal use whenever possible can make it easier to justify these deductions in case of an audit.
8. Legal and Professional Fees
Hiring professionals to assist with your business operations is often tax-deductible. You can potentially claim:
- Attorney fees for business-related matters such as contracts or intellectual property protection
- Fees charged by a local accountant or tax preparer
- Consulting fees for business strategy or financial planning
- Business licensing, LLC registration, and compliance fees
These deductions apply as long as the professional services are directly related to your business activities and that they are “ordinary and necessary” to your line of work.
9. Bank and Payment Processing Fees
Transaction fees from payment processors and business banking fees can add up. Fortunately, these costs are typically tax-deductible, including:
- Merchant service fees from platforms like PayPal, Stripe, or Etsy
- Monthly fees for business bank accounts
- Wire transfer and ATM fees related to business transactions
- Loan interest and financing fees for business-related borrowing
As always, eligibility requirements for deducting these fees can vary, so check the IRS’s business expense deduction guides for the full story.
10. Business Meals and Entertainment
For creators who collaborate with brands or partners, business meals can provide a deduction. The IRS allows deductions for:
- Up to 50% of business meal expenses when dining with clients, partners, or employees
- Meals purchased during business travel, including coffee shop meetings
- Food and drinks provided at company meetings and networking events
Receipts and documentation should clearly indicate the business purpose and attendees to support the deduction. Meals and travel costs are among the most common “red flags” that can trigger an IRS audit, so make sure your documentation is on point if you’re planning to deduct these expenses.
Conclusion
Making a living as a small business owner or content creator is already tough enough, so don’t miss out on these important deductions! Working with a tax professional can often offer the best results (not to mention peace of mind), so consider reaching out to a local accountant for tax help.