All costs of advertising and promoting your business are fully deductible. This includes Google Ads, Facebook and Instagram ads, business cards, flyers, brochures, signage, website design and hosting, domain names, email marketing tools (Mailchimp, Klaviyo), and any other promotional expenses.
A real estate agent spending $8,000/year on Facebook ads, business cards, and listing photography deducts the full amount, saving $2,400–$3,200 in taxes.
Website costs (design, hosting, domain) are marketing expenses — deduct them fully. If a website is a major build, it may need to be amortized over 3 years instead of expensed immediately.
Any software subscription or SaaS tool you pay for and use in your business is fully deductible in the year paid. This includes accounting software (QuickBooks, FreshBooks), design tools (Adobe Creative Cloud, Figma, Canva), communication tools (Zoom, Slack, Microsoft 365), project management tools (Asana, Monday.com), and any other business application.
A freelance designer paying $600/year for Adobe Creative Cloud, $150 for Figma, and $200 for project management tools deducts $950/year, saving $285–$380.
Keep a list of every subscription you pay for and review annually — many professionals forget to deduct tools they use every day. Cancel unused subscriptions to reduce costs.
Photographers, videographers, and content creators can deduct the full cost of cameras, lenses, tripods, lighting equipment, microphones, audio recorders, drones, gimbals, memory cards, hard drives, and any other production equipment used in their business. Under Section 179, the full cost can be expensed in Year 1 instead of depreciated over 5 years.
A photographer purchasing a $3,500 camera body and $1,200 in lenses expenses the full $4,700 under Section 179, saving $1,410–$1,880 in taxes.
For equipment used for both business and personal purposes, only the business-use percentage is deductible. A camera used 80% for client work is 80% deductible.
Computers, laptops, tablets, monitors, keyboards, mice, external hard drives, and other hardware used in your business are fully deductible. Under Section 179, you can expense the full cost in Year 1 instead of depreciating over 5 years. For mixed business/personal use, only the business-use percentage is deductible.
A freelance software engineer purchasing a $2,500 laptop used 95% for work expenses $2,375 under Section 179, saving $713–$950 in taxes.
A second monitor, external keyboard, and docking station are all deductible as business hardware. Track purchases throughout the year — hardware costs add up.
Pass-through business owners (sole props, partnerships, S-Corps, LLCs) can deduct up to 23% of qualified business income starting in 2026, permanently under the OBBBA. The deduction reduces effective tax rates significantly.
A consultant earning $200,000 in QBI deducts $46,000 (23%), saving $17,020 at a 37% rate — $2,220 more than under the old 20% rule.
The OBBBA (July 4, 2025) permanently extended and increased the QBI deduction from 20% to 23% starting in 2026. W-2 wage and property limitations still apply above income thresholds. Restructuring into an S-Corp can maximize the W-2 wage limitation.
A UNK client ran a plumbing business generating $180,000 in net income. His previous tax preparer had never mentioned the QBI deduction. Uncle Kam identified that he qualified for the full 23% deduction under the OBBBA — $41,400 off his taxable income. At his 22% marginal rate, this saved $9,108 in federal taxes. The deduction is now permanent, so the client is working with Uncle Kam to stack it with retirement contributions and S-Corp election for maximum benefit.
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Be the Next Win — Book a CallThe Qualified Business Income (QBI) deduction under Section 199A allows owners of pass-through businesses — sole proprietorships, S-Corps, LLCs, and partnerships — to deduct up to 23% of their qualified business income starting in 2026, permanently extended and enhanced under the OBBBA. The full deduction is available if taxable income is below approximately $197,300 (single) or $394,600 (married filing jointly).
Yes. S-Corp owners can claim the QBI deduction on their share of the S-Corp's qualified business income. However, W-2 wages paid to yourself as an S-Corp employee are not included in QBI — only the pass-through profit qualifies.
It depends on income. Consultants are classified as a "specified service trade or business" (SSTB), which means the QBI deduction phases out above approximately $197,300 (single) or $394,600 (married) in 2026. Below those thresholds, consultants get the full 23% deduction.
Yes — the OBBBA permanently extended and enhanced the QBI deduction, increasing it from 20% to 23% starting in 2026. It no longer faces a sunset date. This is one of the most significant permanent tax changes for self-employed individuals and pass-through business owners.
The basic calculation is 23% of your qualified business income, limited to the lesser of 23% of QBI or 50% of W-2 wages paid by the business (or 25% of W-2 wages plus 2.5% of qualified property). For most small business owners below the income thresholds, the calculation is simply 23% of net business income.
When you hire your child who is under the age of 18 in your sole proprietorship or a partnership where both partners are parents of the child, their wages are generally exempt from Social Security and Medicare (FICA) taxes. This significant tax deduction is outlined in IRS Publication 15, Circular E, Employer's Tax Guide. This exemption applies as long as the business is not a corporation or a partnership with non-parent partners. This can lead to substantial FICA tax savings for both the employer and the employee, allowing more of the child's earnings to be retained.
Yes, wages paid to your child for services performed in your trade or business are deductible as a business expense, provided the compensation is reasonable for the services rendered, regardless of their age. For federal unemployment tax (FUTA) purposes, wages paid to a child under the age of 21 by their parent are exempt. This FUTA exemption is detailed in IRS Publication 15, Circular E, Employer's Tax Guide. This means you do not owe FUTA tax on their earnings, further reducing your overall tax burden while still benefiting from the wage deduction.
Yes, if you operate as a sole proprietorship, partnership, or S-corporation and pay health insurance premiums for a family member employee, these premiums can be deductible as a business expense. For a sole proprietorship, if the family member is a bona fide employee and the plan covers them, you may be able to deduct the premiums. Additionally, if the family member is your spouse and you offer a health plan to all employees, the premiums for your spouse can be deducted. This is consistent with IRS guidance on deductible business expenses under IRC Section 162.
The 'kiddie tax' generally applies to unearned income of a child, such as investment income, above a certain threshold (e.g., $2,500 for 2026, adjusted for inflation). However, wages earned by a child from employment in a family business are considered earned income and are not subject to the kiddie tax rules. This is crucial because it means the child's earned income will be taxed at their own, typically lower, individual tax rates, rather than their parents' higher marginal tax rates. This distinction is outlined in IRS Publication 929, Tax Rules for Children and Dependents.
When you hire a family member in an S-corporation or C-corporation, their wages are generally subject to the same federal payroll taxes (Social Security, Medicare, and FUTA) as any other employee. Unlike sole proprietorships or partnerships with only parent partners, the FICA and FUTA exemptions for children under 18 or 21 do not apply in corporate structures. This is because the corporation is considered a separate legal entity from the family. Therefore, you must withhold and pay these taxes according to standard payroll procedures, as detailed in IRS Publication 15, Circular E.
Tradespeople and contractors can deduct the full cost of tools and equipment used in their business. Small tools (under $2,500) are expensed immediately. Larger equipment qualifies for Section 179 immediate expensing or 100% bonus depreciation. This includes hand tools, power tools, ladders, scaffolding, safety gear, hard hats, work boots, and any other equipment used on the job.
A general contractor spending $5,000/year on tools, safety equipment, and work gear deducts the full amount, saving $1,500–$2,000 in taxes.
Work boots and safety gear required for your trade are deductible as protective clothing. Keep all receipts — tool purchases add up quickly over a year.
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Expenses incurred to build and maintain referral relationships with real estate agents, builders, and financial planners are fully deductible. This includes meals with referral partners (50% deductible), co-branded marketing materials, client appreciation events, and educational seminars you host for Realtors.
A loan officer spending $500/month on Realtor relationship marketing deducts $6,000/year (meals at 50%, materials at 100%).
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Pass-through business owners (sole props, S-Corps, LLCs, partnerships) can deduct up to 20% of qualified business income from taxable income. This is one of the largest tax breaks available to small business owners.
A business owner with $200,000 in QBI at a 24% rate: 20% deduction = $40,000 reduction in taxable income = $9,600 in tax savings.
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Self-employed individuals have access to powerful retirement plans — Solo 401(k), SEP-IRA, SIMPLE IRA — with contribution limits far exceeding W-2 employee options.
Maximizing a Solo 401(k) at ~$70,000 in 2026 saves $25,900 at a 37% rate — the equivalent of a $25,900 tax refund.
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If you use your cell phone for business, you can deduct the business-use percentage of your monthly bill, data plan, and the cost of the device itself. For most self-employed professionals, this is 80–100% of the total cost.
A freelancer paying $120/month for their phone and using it 90% for business deducts $1,296/year, saving $389–$518 depending on tax bracket.
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Your home internet bill is deductible to the extent it is used for business. For most self-employed professionals who work from home, this is 50–100% of the monthly cost. A dedicated business internet line is 100% deductible.
A self-employed consultant paying $80/month for internet and using it 80% for business deducts $768/year, saving $230–$307 in taxes.
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The cost of accounting, bookkeeping, and tax preparation for your business is fully deductible. This includes CPA fees for tax preparation and planning, bookkeeper fees, payroll service costs (Gusto, ADP, Paychex), accounting software (QuickBooks, Xero), and any other professional fees related to managing your business finances.
A self-employed consultant paying $3,500/year for CPA services, bookkeeping, and QuickBooks deducts the full amount, saving $1,050–$1,400 in taxes.
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Protective clothing and safety equipment required for your trade or job site is fully deductible. This includes steel-toed work boots, hard hats, safety glasses, hearing protection, gloves, high-visibility vests, respirators, and any other OSHA-required or job-required safety gear. The key test: the gear must be required for the job and not suitable for everyday wear.
A contractor spending $600/year on work boots, gloves, safety glasses, and hard hats deducts the full amount, saving $180–$240 in taxes.
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If you rent a booth, chair, or suite in a salon or barbershop, your rental fees are fully deductible as a business expense. This is typically the largest deduction for booth renters — most pay $200–$600/week in booth rent, adding up to $10,400–$31,200/year in fully deductible expenses.
A hair stylist paying $350/week in booth rent deducts $18,200/year, saving $5,460–$7,280 in taxes.
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Personal trainers and fitness professionals can deduct the cost of equipment and supplies used in their business. This includes resistance bands, foam rollers, kettlebells, dumbbells, mats, stopwatches, heart rate monitors, fitness apps, and any other tools used with clients. Certification renewal fees (NASM, ACE, NSCA, ACSM) and continuing education are also fully deductible.
A personal trainer spending $2,500/year on equipment, certification renewals, and liability insurance deducts the full amount, saving $750–$1,000.
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Legal fees paid for business purposes are fully deductible. This includes attorney fees for drafting contracts, reviewing leases, employment matters, business disputes, entity formation (LLC, S-Corp), intellectual property protection, and any other legal services directly related to your business operations.
A business owner paying $4,000/year in attorney fees for contracts and business matters deducts the full amount, saving $1,200–$1,600 in taxes.
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Deduct business vehicle expenses using the standard mileage rate or actual expenses (depreciation, gas, insurance, repairs). Section 179 and 100% bonus depreciation allow full expensing of heavy SUVs and trucks in Year 1.
Driving 20,000 business miles at 72.5¢/mile = $14,500 deduction. A $80,000 SUV over 6,000 lbs can be fully expensed under 100% bonus depreciation, saving $29,600 at 37%.
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Immediately expense the full cost of qualifying business equipment, software, and certain vehicles in the year of purchase instead of depreciating over multiple years.
Purchasing $500,000 in equipment. Full §179 deduction saves $185,000 in taxes at a 37% rate in Year 1 vs. spreading over 5–7 years.
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Deduct a portion of your home expenses (mortgage interest, rent, utilities, insurance, depreciation) based on the percentage of your home used exclusively and regularly for business.
A 200 sq ft office in a 2,000 sq ft home = 10% allocation. $30,000 in home expenses × 10% = $3,000 deduction, saving $1,110 at a 37% rate.
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Self-employed individuals and small business owners can contribute up to 25% of net self-employment income (maximum $72,000 in 2026) to a SEP-IRA with minimal administrative requirements.
A freelancer earning $150,000 contributes $27,500 (25% × $110,000 net SE income) to a SEP-IRA, saving $10,175 in taxes at a 37% rate.
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Self-employed individuals can deduct 50% of the self-employment tax they pay (the employer-equivalent portion) as an above-the-line deduction, reducing adjusted gross income.
A freelancer with $100,000 in net SE income pays $14,130 in SE tax. The 50% deduction ($7,065) saves $2,614 at a 37% rate.
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If you rent a separate studio space for your creative work, the full cost of rent, utilities, and equipment for that space is deductible. If you use a dedicated room in your home exclusively as a studio, it qualifies for the home office deduction. This applies to photography studios, podcast recording studios, video production spaces, and any other dedicated creative workspace.
A photographer renting a studio for $1,500/month deducts $18,000/year in rent, saving $5,400–$7,200 in taxes.
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Self-employed individuals can contribute both as employee ($24,500 in 2026, or $31,000 if 50+) and employer (up to 25% of compensation), for a combined maximum of approximately $70,000.
A self-employed consultant earning $200,000 contributes ~$70,000 to a Solo 401(k), reducing taxable income to $130,000 and saving $25,900 at a 37% rate.
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Under IRC §280A(g), a homeowner can rent their personal residence to their business for up to 14 days per year. The rental income is completely tax-free to the homeowner, and the business deducts the full rental payment.
A business owner renting their home to their S-Corp for 14 days at $2,000/day: $28,000 in tax-free income to the owner + $28,000 business deduction saves $10,360 at a 37% rate.
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If you are required to hold a professional license to practice your trade, the cost of obtaining and renewing that license is fully deductible as a business expense. This includes state bar fees for attorneys, medical license renewals, nursing licenses, contractor licenses, real estate licenses, CPA licenses, and any other required professional credentials.
A physician paying $2,500/year in state medical license fees, DEA registration, and board certification renewals saves $750–$1,000 in taxes.
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All fees associated with your business bank account and payment processing are fully deductible. This includes monthly account maintenance fees, wire transfer fees, Stripe processing fees (typically 2.9% + 30¢), PayPal fees, Square fees, and any other merchant processing costs. For businesses processing significant revenue, these fees add up to thousands per year.
An ecommerce seller processing $200,000/year through Stripe pays approximately $5,830 in fees — fully deductible, saving $1,749–$2,332 in taxes.
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Continuing education required to maintain your professional license or improve skills in your current trade is fully deductible. This includes CME credits for physicians, CLE credits for attorneys, CPE credits for CPAs, CE credits for nurses, real estate CE, and any other mandatory or voluntary professional development directly related to your current work.
A CPA spending $3,000/year on CPE courses, webinars, and AICPA membership saves $900–$1,200 in taxes.
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All software used to run your mortgage business is fully deductible — CRM platforms (Salesforce, Follow Up Boss, BNTouch), loan origination software (Encompass, Calyx, Byte), pricing engines, rate alert tools, document management systems, and e-signature platforms.
A loan officer using Encompass, a CRM, and e-signature tools may deduct $4,000–$8,000/year.
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Healthcare professionals can deduct the cost of medical supplies and clinical equipment used in their practice. This includes stethoscopes, blood pressure cuffs, otoscopes, diagnostic tools, syringes, gloves, masks, bandages, and any other consumable or durable medical supplies used in patient care. Larger equipment qualifies for Section 179 immediate expensing.
A self-employed nurse practitioner spending $2,000/year on clinical supplies, a new stethoscope, and diagnostic tools deducts the full amount, saving $600–$800.
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Deduct education expenses that maintain or improve skills required in your current trade or business, including courses, books, subscriptions, and professional conferences.
Spending $5,000 on courses, conferences, and books deducts the full amount, saving $1,850 at a 37% rate.
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Self-employed individuals can deduct 100% of health insurance premiums paid for themselves, their spouse, and dependents as an above-the-line deduction.
Paying $18,000/year in family health insurance premiums deducts the full amount, saving $6,660 at a 37% rate.
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Gig delivery drivers can deduct all supplies and equipment used in their delivery business. This includes insulated delivery bags, hot bags, cold bags, phone mounts, car chargers, power banks, flashlights, and any other gear used to complete deliveries. These are small but real deductions that add up over a year of full-time delivery work.
A DoorDash driver spending $400/year on insulated bags, phone mounts, and car accessories deducts the full amount, saving $120–$160 in taxes.
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If you rent a coworking space, shared office, or dedicated office for your business, the full cost is deductible. This includes WeWork, Regus, local coworking memberships, and any other office rental. Monthly membership fees, day passes, and dedicated desk or private office costs all qualify.
A freelancer paying $400/month for a coworking membership deducts $4,800/year, saving $1,440–$1,920 in taxes.
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S-Corp shareholders pay payroll taxes only on their "reasonable salary," not on all business profits. Distributions above the salary avoid 15.3% self-employment tax.
A business earning $300,000 net. Salary set at $80,000 (reasonable). Distributions: $220,000. SE tax savings: $220,000 × 15.3% = $33,660/year.
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LLCs are tax-neutral entities — the tax election determines how income is taxed. S-Corp election saves self-employment taxes; C-Corp election enables retained earnings at 21% rate.
An LLC earning $200,000 net profit: default taxation costs $28,240 in SE tax. S-Corp election with $80,000 salary saves $12,000+/year in SE taxes.
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Subscriptions to property data tools, appraisal review software, flood zone determination services, and automated valuation model (AVM) platforms used in your mortgage business are fully deductible. This includes CoreLogic, DataMaster, Mercury Network, and similar tools.
Annual subscriptions to property data and appraisal tools typically run $1,500–$4,000/year — all deductible.
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All professional beauty supplies and tools used in your business are fully deductible. This includes hair color and developer, shampoos and conditioners, styling products, scissors, clippers, trimmers, blow dryers, flat irons, curling irons, capes, towels, gloves, and any other supplies used on clients. Product purchased for resale to clients is also deductible as cost of goods sold.
A hair stylist spending $4,000/year on color, supplies, and tools deducts the full amount, saving $1,200–$1,600 in taxes.
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Deduct ordinary and necessary travel expenses when traveling away from home for business, including transportation, lodging, and 50% of meals.
A business owner spending $15,000/year on travel (flights, hotels, meals) deducts $13,500 (meals at 50%), saving $4,995 at a 37% rate.
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The federal EV tax credit (§30D) for consumer vehicles was expired by the One Big Beautiful Bill Act (OBBBA), signed July 4, 2025. Business vehicles may still qualify for Section 179 and 100% bonus depreciation deductions regardless of EV status.
A business owner purchasing a $60,000 electric SUV (6,000+ lbs) can still fully expense it under 100% bonus depreciation, saving $22,200 at 37% — regardless of EV credit status.
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Any supplies you purchase and use in your business are fully deductible in the year purchased. This includes paper, pens, printer ink and toner, folders, binders, postage, envelopes, labels, staples, tape, and any other consumable materials used in your work.
A small business owner spending $1,200/year on office supplies saves $360–$480 in taxes depending on their bracket.
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Every dollar you spend on Meta Ads, Google Ads, or TikTok ads is 100% deductible as an ordinary business expense under IRC §162 — including testing budgets and failed campaigns.
Marketing SaaS tools (HubSpot, Klaviyo, ClickFunnels, Canva Pro, etc.) are fully deductible — most digital marketers undercount these and leave $5,000–$15,000/yr on the table.
If you create courses, podcasts, or video content, your camera gear, microphones, lighting, and editing software are all deductible under Section 179 in the year of purchase.
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