Running a small business in 2025 is more complex—and more opportunity-filled—than ever before. As the tax code evolves and inflation-adjusted thresholds shift, knowing which deductions you qualify for can make a significant difference in your bottom line.
At Polaris Tax & Accounting, we help clients not only file on time, but plan ahead to maximize every dollar. Below, we break down the most valuable and commonly overlooked tax deductions available to small business owners this year.
1. Home Office Deduction
If you regularly use part of your home exclusively for business, you may be able to deduct a portion of your rent or mortgage, utilities, insurance, and repairs. The simplified method allows $5 per square foot (up to 300 sq. ft.), or you can calculate the actual costs.
Note: Be sure to maintain documentation. The IRS scrutinizes this deduction, but with proper records, it can be a significant saver.
2. Business Use of Vehicle
Do you use a personal vehicle for business travel? You can deduct mileage at the IRS standard rate (67 cents per mile for 2025) or actual expenses. Either way, keeping a mileage log is critical.
This is especially valuable for contractors, real estate agents, and mobile professionals. For those using a business-dedicated vehicle, depreciation may also apply.
3. Start-Up and Organizational Costs
New businesses can deduct up to $5,000 of start-up expenses and $5,000 in organizational costs in their first year of operation. These include legal fees, marketing, and business registration costs.
If you’ve just launched your venture in Florida, this is a deduction not to miss.
Related: Why Virtual Accounting Firms Are the Future for South Florida Businesses
4. Employee Wages and Payroll Taxes
If your business has employees, wages, benefits, and employer-paid payroll taxes are deductible. This includes employer contributions to retirement plans, health insurance, and more.
Learn more: Payroll & HR Services and Getting Started with Gusto Payroll
5. Contract Labor and Professional Fees
Hiring freelancers or consultants? Payments to independent contractors are deductible, along with legal, accounting, and professional fees.
This is especially relevant for businesses that outsource bookkeeping or tax services. If you’re working with a firm like Polaris, your fees may be deductible.
6. Office Supplies and Equipment
Pens, paper, printer ink—and that new laptop for your business? Deductible.
Under Section 179, many equipment purchases can be fully deducted in the year of purchase. This can make a big impact if you’re upgrading your tech stack or furnishing a new space.
Related: Getting Started with Xero and Business Accounting & Bookkeeping Services
7. Utilities and Rent
Whether you rent an office or coworking space, or just pay for phone and internet to run your business, these are deductible expenses.
Make sure these are separated from personal-use costs if you’re sharing services.
8. Business Insurance
General liability, professional liability, cyber coverage, and workers’ comp? All deductible, and all vital.
Don’t forget: if your business is remote, you may also deduct a portion of homeowner’s or renter’s insurance.
9. Education and Certifications
Courses, certifications, industry subscriptions, or conferences that maintain or improve your skills in your current trade are deductible.
Stay current—and get tax benefits for investing in yourself.
10. Software and Subscriptions
Do you pay for invoicing software, cloud storage, scheduling tools, or email marketing services? Monthly business software and app subscriptions are deductible, even for solopreneurs.
Final Tip: Keep Clean Books Year-Round
Deductions are only as good as your records. Don’t scramble at year-end—stay on top of your finances with up-to-date, accurate books.
Explore our Real-Time Bookkeeping approach or our Catch-Up & Cleanup Services
Ready to Save Smarter?
Let Polaris Tax & Accounting help you track deductions, optimize expenses, and stay compliant.
📍 Based in Plantation, FL—supporting small businesses across South Florida and beyond.
📞 Call 954-423-3577
🌐 Visit: https://polaristaxandaccounting.com