You're leaving money on the table. Every year, Denver business owners miss thousands in legitimate deductions. Not because they're doing anything wrong. Just because nobody told them these deductions existed.
The tax code is 6,871 pages long. You're not expected to memorize it. But knowing these 15 commonly overlooked deductions can save you $5,000 to $25,000 or more in taxes this year. That's real money you can reinvest in your business.
If you're self-employed and pay your own health insurance, those premiums are deductible. Not as an itemized deduction on Schedule A. As an above-the-line deduction on Schedule 1 of your Form 1040.
This matters because above-the-line deductions reduce your adjusted gross income. Lower AGI means you qualify for more credits and phase-outs. It's a better deduction than itemized medical expenses.
You can deduct premiums for medical insurance, dental insurance, and qualified long-term care insurance. The insurance must be established under your business. You can't deduct premiums if you're eligible for employer-sponsored coverage through your spouse's job.
S-Corp owners have a special rule. You can deduct health insurance premiums as long as they're reported as wages on your W-2. Your business CPA needs to set this up correctly or you lose the deduction.
The IRS provides detailed rules in Publication 535. Read the section on health insurance for self-employed individuals. It's dense but important.
You work from home. Part of your house is your office. You can deduct it. The simplified method allows $5 per square foot up to 300 square feet. That's $1,500 maximum.
Not huge. But it's $1,500 you're giving away if you don't claim it. And the simplified method means no complicated calculations. No tracking every utility bill. Just measure your office and multiply.
The regular method calculates actual expenses: mortgage interest, property taxes, utilities, insurance, repairs. You deduct the business percentage based on square footage. This takes more work but saves more money in expensive Denver real estate.
A 200 square foot office in a 2,000 square foot house is 10% business use. If your mortgage interest, taxes, insurance, and utilities total $40,000 annually, you deduct $4,000. Much better than the $1,000 simplified method.
Work with someone who understands small business deductions to calculate both methods. Pick the one that saves you more. Different rules apply depending on whether you own or rent.
You drive for business. You track mileage. But are you using the method that maximizes your deduction?
The standard mileage rate for 2026 is 70 cents per mile. Drive 10,000 business miles and you deduct $7,000. Easy. But the actual expense method might save more if you drive an expensive vehicle or live in a high-cost area like Denver.
Gas, oil, repairs, insurance, registration, car washes, parking fees, tolls. Add it all up. Multiply by your business use percentage. Include depreciation on the vehicle purchase price. This often exceeds standard mileage for expensive vehicles.
You can't switch between methods randomly. Once you use actual expenses on a vehicle, you're locked in for that vehicle's lifetime. Choose wisely in year one.
The IRS standard mileage rates get announced annually. Check them each year. The rate changes based on gas prices and vehicle costs.
Business meals are usually 50% deductible. But temporary rules allowed 100% deduction for restaurant meals through 2025. Congress keeps extending this provision. Check if it's still available when you file.
Even at 50%, business meals are valuable deductions. Meeting clients for coffee. Taking your team to lunch. Food at business conferences. All deductible.
You need to document the business purpose, attendees, date, location, and amount. A credit card receipt isn't enough. Note who you met with and what you discussed on the receipt or in your calendar.
Many Denver business owners lose meal deductions because documentation is incomplete. Your bookkeeping service can help you set up a system that captures this information automatically.
Your cell phone is partly business use. So is your home internet. You can deduct the business portion. Most small business owners don't bother because they think the amount is too small.
Wrong thinking. A $100 monthly cell phone bill is $1,200 annually. If 60% is business use, that's $720 deduction. Add internet at $80 monthly with 80% business use. That's another $768. Total: $1,488 deduction from two expenses you're already paying.
Track your usage for one representative month. Count business calls, emails, and data usage. Calculate the percentage. Apply that percentage to your annual bills. Save the documentation in case the IRS asks.
If you have a dedicated business line, you can deduct 100% of that line. No need to calculate percentages. Simpler and cleaner.
Courses, conferences, workshops, certifications. If they improve your skills in your current business, they're deductible. Books, online courses, industry conferences, all of it.
Denver hosts dozens of business conferences annually. Deduct the registration fees. Deduct travel and lodging if the conference is out of town. Deduct meals at 50%.
The education can't qualify you for a new profession. A dentist can deduct continuing education in dentistry. But that same dentist can't deduct law school tuition because law school qualifies you for a new profession.
Gray areas exist. Talk to your tax accountant before spending large amounts on education. Better to know the rules upfront than face denied deductions later.
General liability insurance. Professional liability. Business property insurance. Workers compensation. All deductible as ordinary business expenses.
Denver business owners pay meaningful premiums for these policies. A contractor might pay $15,000 annually for general liability and workers comp. That's $15,000 in deductions. Don't leave it unclaimed.
One exception: life insurance premiums aren't deductible if you're the beneficiary. The death benefit is tax-free but the premiums aren't deductible. This surprises people.
Key person insurance on employees is sometimes deductible depending on the structure. This gets complicated fast. Get professional advice before assuming anything about life insurance deductibility.
Self-employed individuals can contribute up to $69,000 to a SEP IRA or Solo 401(k) in 2026. That's all tax-deductible. Every dollar reduces your taxable income.
This is one of the most powerful deductions available. A Denver business owner with $200,000 in net self-employment income could contribute $69,000 to retirement. That saves roughly $25,000 in federal and state taxes.
SEP IRAs are simpler. No annual filings. Contribute up to 25% of compensation or 20% of net self-employment income. Maximum $69,000 in 2026.
Solo 401(k)s allow elective deferrals up to $23,000 plus employer contributions up to 25% of compensation. Total limit is still $69,000. But the Solo 401(k) lets you contribute more at lower income levels.
Your tax strategy should include retirement planning. Contributing $69,000 annually for 10 years builds serious wealth. And it saves taxes today. Win-win.
You borrowed money for business purposes. The interest is deductible. Business loans, lines of credit, credit cards used for business expenses. All generate deductible interest.
Small business owners often mix personal and business expenses on the same credit card. That's a mistake. The IRS wants clear separation. Business expenses on business cards. Personal expenses on personal cards.
If you must use a personal card for business, track which charges were business. Calculate the interest attributable to business purchases. Only that portion is deductible. This is tedious and error-prone.
Better solution: get a business credit card. Use it only for business. Deduct 100% of the interest. No calculations. No tracking. Much cleaner.
QuickBooks. Microsoft 365. Adobe Creative Cloud. CRM software. Project management tools. All deductible business expenses.
Software subscriptions add up fast. Many businesses spend $500-2,000 monthly on software. That's $6,000-24,000 annually in deductions. Track every subscription. Deduct them all.
Computers, printers, phones, tablets. Equipment under $2,500 per item can be deducted immediately using the de minimis safe harbor. No depreciation required. Simpler accounting. Faster tax benefit.
Equipment over $2,500 either depreciates over multiple years or qualifies for bonus depreciation or Section 179. Your bookkeeper needs to know which method you're using. Different methods create different tax results.
Monthly bank fees. Transaction fees. Credit card processing fees. Merchant account charges. All deductible.
Denver businesses accepting credit cards pay 2-3% processing fees. A business with $500,000 in card sales pays $10,000-15,000 in processing fees annually. That's real money. Deduct it.
Business bank account fees are clearly deductible. Personal account fees are not. Don't mix personal and business funds in the same account. It creates documentation nightmares.
Open a business checking account. Run all business income and expenses through it. Pay yourself a distribution or salary. Keep business and personal completely separate. Your tax compliance improves dramatically.
Attorney fees. Accounting fees. Business consulting. Tax preparation. All deductible as professional services.
Forming an LLC or corporation costs $500-2,000 in legal fees. Ongoing legal review of contracts costs more. Annual tax prep runs $1,000-5,000 depending on complexity. These expenses are fully deductible.
Legal fees for personal matters aren't deductible. Divorce attorney. Personal injury attorney. Estate planning. None of that is business-related so none is deductible.
The line blurs when legal issues involve both personal and business matters. Allocate fees between business and personal. Deduct only the business portion. Document your allocation in case the IRS questions it.
Website hosting. Google Ads. Facebook advertising. Business cards. Promotional materials. All deductible marketing expenses.
Digital marketing has exploded. Denver businesses spend $2,000-10,000 monthly on digital advertising. Over a year, that's $24,000-120,000. Every penny is deductible if you're generating business leads or sales.
Good business owners track marketing ROI. Which channels produce customers? Which waste money? This same tracking creates perfect documentation for tax deductions.
Save all invoices from marketing vendors. Screenshot online ad receipts. Keep copies of printed materials. Your accountant needs this backup to substantiate deductions.
You can deduct up to $25 per person per year for business gifts. Not much. But it adds up if you have many clients or referral sources.
Send holiday gifts to your top 50 clients. Spend $25 each. That's $1,250 deduction. The gifts build relationships and they're tax-deductible. Good business and good tax planning.
Employee gifts fall under different rules. Achievement awards and safety awards can be excluded from employee income if structured correctly. Holiday bonuses are taxable compensation. The rules are specific and technical.
Talk to your tax prep team before giving large gifts to employees. Structure it correctly and everyone benefits. Structure it wrong and the IRS disallows your deduction or taxes the employee.
Colorado income taxes attributable to your business income are deductible. Denver business licenses and occupation taxes are deductible. Sales tax you paid on business purchases is deductible if you didn't claim a sales tax credit.
These deductions are easy to miss because they don't appear on a monthly invoice. They're annual payments that slip through the cracks. Review your prior year tax returns. Make a list of every tax you paid. Deduct them all.
If you own your business building, property taxes are deductible. If you own equipment or vehicles, personal property taxes are deductible. The home office deduction includes a portion of residential property taxes.
Add up all these tax deductions and you could easily have $5,000-15,000 in overlooked deductions. That's $2,000-5,000 in tax savings you've been leaving on the table.
The IRS doesn't challenge the amount of most deductions. They challenge the documentation. You say you spent $10,000 on meals. Prove it. Show receipts. Show business purpose. Show who you met with.
Good documentation starts with good systems. Your tax planning should include documentation systems that capture everything automatically.
Expense tracking apps sync with bank accounts and credit cards. They categorize transactions automatically. You snap photos of receipts. The app stores them. At year end, you have everything organized.
This technology didn't exist 10 years ago. Today it's cheap and easy. Use it. The time savings alone justify the cost. The tax audit protection is a bonus.
These 15 deductions are just the beginning. The tax code contains hundreds of legitimate deductions for business owners. Finding them requires expertise.
DIY tax prep works fine if your business is simple. One income source. Few expenses. No employees. But once you're running a real business, professional help pays for itself.
A qualified small business tax specialist finds deductions you didn't know existed. They structure transactions to minimize taxes. They keep you compliant with constantly changing rules.
The investment in professional tax help typically saves 3-5 times what you pay. That's a return most investments can't match. And you get peace of mind knowing things are done correctly.
