Maximizing Deductions: Smart Strategies for Small Business Owners

When it comes to running a small business, every dollar counts—and that includes the ones you don’t have to pay in taxes. Knowing which expenses are deductible and how to claim them properly can significantly reduce your tax burden and improve your bottom line.

At Velin & Associates, Inc., we work with business owners every day to ensure they’re taking full advantage of the deductions they’re entitled to—without triggering red flags with the IRS.

Here’s how you can make the most of your deductions, plus common opportunities many business owners miss.

What Qualifies as a Business Deduction?

The IRS allows you to deduct ordinary and necessary expenses incurred while operating your business. These include:

• Rent and utilities

• Salaries and wages

• Office supplies

• Advertising and marketing

• Business insurance

• Professional services (legal, accounting, consulting)

• Travel, meals, and entertainment (with restrictions)

• Depreciation of assets

• Software and subscriptions

Pro Tip: Keep detailed records and receipts for every deductible expense. Clean, well-organized bookkeeping is key to maximizing deductions and staying audit-proof.

💡 Commonly Overlooked Deductions

Even the most seasoned business owners often miss valuable deductions. Here are some frequently forgotten ones:

1. Home Office Deduction

If you regularly and exclusively use part of your home for business, you may qualify. There’s even a simplified method to make claiming it easier.

2. Startup Costs

Launched your business recently? You can deduct up to $5,000 in startup expenses in your first year (with limits based on your total costs).

3. Business Use of Personal Vehicle

Using your personal car for business? You may deduct mileage or actual expenses—but you must keep a log.

4. Health Insurance Premiums

Self-employed? You might be able to deduct your health insurance premiums for yourself and your family.

5. Continuing Education

Courses, certifications, books, or seminars that improve your skills in your existing business are deductible.

6. Interest on Business Loans or Credit Cards

Interest payments on debt used solely for business purposes are generally deductible.

⚠️ Avoid These Deduction Pitfalls

While deductions are valuable, they must be handled correctly:

• Mixing business and personal expenses can lead to audits and disallowed deductions.

• Overestimating expenses, like meals and travel, without documentation can raise red flags.

• Failing to track depreciation means you miss out on long-term deductions for big purchases.

Our advice: Work with an experienced tax professional who understands your industry and can help you stay compliant while maximizing every dollar.

🧾 Why Work with Velin & Associates, Inc.?

We specialize in helping small business owners save money and stay compliant with a proactive, personalized approach to tax planning. Our team of CPAs ensures:

• You’re taking every deduction legally available

• Your books are clean and audit-ready

• You’re never surprised by a tax bill you could have avoided

Get the Most from Your Business Deductions

The tax code is complex, but you don’t have to navigate it alone. Let us help you uncover hidden opportunities and keep more of what you earn.

📞 323-902-1000
📧 dmitriy@losangelescpa.org
🌐 www.losangelescpa.org