11 Business Deductions Even the Smallest Business Can Claim

It can be costly to run a business. Every expense, from maintaining the lights to purchasing inventory, comes with a price. You may be able deduct some of these expenses to lower your taxes. These deductions are available to even small businesses that have fewer than 10 employees.

You must prove that you are entitled to a deduction if you want to claim it. It is important to learn how to prepare for an audit before you start looking at the IRS. If the IRS ever questions your financial records, you should be ready to provide proof of expenses. Save your receipts and demonstrate your math.

11 common tax deductions that small businesses can claim

1. Rent expenses

You might be able deduct rent expenses from your business taxes if you rent the place where you run your business. You might be eligible to deduct rent payments if you own a home office. However, this is only applicable to your home office. This deduction is not available if your home office is located in another living space. You may not be eligible for the rent expense deduction if your desk is located in your bedroom.

2. Utilities

You can deduct utilities such as water, electricity and phone. You may be eligible to deduct some of your utility bills if you operate your business remotely. You can, for example, deduct a portion from your electric bill that corresponds with the amount of space your home office occupies. You can also deduct business usage of your cell phone if you have it for business purposes.

3. Repairs

To keep your business running smoothly, you might have to make minor repairs to your office space. Repairs are deductible. Repairs can be deducted by home-based businesses. However, home repairs can only be deducted if they are made at your home office.

4. Office supplies

You may be eligible to deduct any office supplies that you use in your business. You may be eligible to deduct the costs of paper, ink cartridges and staples, as well as desks, bookcases and other office supplies.

5. Office equipment

All office equipment, including fax machines, copiers, and fax machines, are eligible for deductible. You might not be able to deduct all costs within one year, however, as office equipment is often expensive. Learn how to calculate depreciation expense .

6. Taxes

You may be eligible to deduct certain federal and state taxes from your business taxes. You may be eligible to deduct taxes relating to employer or real estate; licenses and regulatory fees might also be deductable.

7. Insurance

Your insurance premiums may be eligible for deduction. You can, for example, deduct workers' compensation and liability premiums.

8. Software

If you use the software for business purposes, it may be possible to deduct any boxed, downloadable or online subscriptions. Your online payroll and accounting software subscriptions, for example, may be deductible.

9. Advertising

Many common advertising and promotion expenses can be deducted, including business cards, phonebook ads and website costs.

10. Consulting fees

The consulting fees paid to an accountant, lawyer or other professional may be deductible if your business requires their assistance.

11. Training and education

You might be able to deduct the cost of any training or education that you take to improve or maintain your skills. Trade shows, conferences and books, DVDs and subscriptions to trade journals, newspapers and magazines may be eligible for tax deduction. Education events and materials not related to your business cannot be deducted. Take advantage of these deductions at every chance you get so you can have extra spending money at the end of the year.