A lot of business owners are laser-focused on top-line revenue, and fair enough. Growth is exciting. But your bottom line tells the real story, and one of the most underused tools to protect it is tax strategy. Specifically: deductions. Every dollar you deduct is a dollar you keep. So why are so many business owners still leaving money on the table?
Here’s a breakdown of the deductions worth knowing and using, before the year ends.
First Things First: The Truth About Business Deductions
Let’s clear something up first: you do not need to itemize your personal deductions to take deductions for your business. This is a common and costly misconception. Business deductions reduce your business’s taxable income directly. They’re not tied to your Schedule A or your the standard deduction. If you’re running your numbers through that lens, it’s time to reframe.
High-Impact Year-End Deductions You Shouldn’t Miss
Qualified Business Income (QBI) Deduction
If your business is eligible, you can deduct up to 20% of your qualified business income. That’s a major break, but it comes with fine print. There are income limits, phase-outs, and industry-specific exclusions. Strategic adjustments like shifting wages or business entity structure can preserve or enhance your eligibility. These are exactly the kinds of moves you should explore in a year-end tax strategy meeting, not left to chance at tax time.
Section 179 & Bonus Depreciation
Planning to upgrade equipment or invest in your business this year?
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Section 179 lets you immediately expense up to $1.16 million in qualifying purchases.
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Bonus depreciation is still available at 40% in 2025, but it’s declining further next year.
Timing matters.
A tax strategy session can help you time these purchases to maximize deductions before you spend, not after the return is already filed.
Retirement Contributions
Business-funded retirement plans like SEP IRAs, SIMPLE IRAs, and Solo 401(k)s reduce your taxable income and build long-term wealth.The type of plan, your contribution limits, and your year-end income all affect how much you can deduct. Reviewing this ahead of time in a planning session can help you get the most bang for your buck and avoid surprises at filing time.
Deductions Tailored to Your Industry
Your industry influences what’s deductible, and some of the most powerful write-offs are the ones most people don’t know about:
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Construction & Real Estate:
Cost segregation studies can shift depreciation timelines and unlock massive short-term savings. -
Medical & Healthcare:
Equipment, licensing, malpractice insurance, and even continuing education — all deductible. -
E-commerce & Retail:
Inventory adjustments, shipping materials, and digital marketing spend — they add up fast. -
Consultants & Freelancers:
Home office, software subscriptions, and business travel are often ignored but fully legitimate.
If your CPA doesn’t ask about your niche and how your business actually operates, it’s time to find one who does.
Specialized Deductions That Pack a Punch
R&D Tax Credit
You don’t need a lab coat to qualify. If your business is improving products, processes, or software, even internally, you might qualify.
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A boutique bakery developing new recipes?
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A service provider enhancing internal software workflows?
Both could be eligable.
Documentation is key, and the reward is a direct credit (not just a deduction), dollar-for-dollar reducing your tax liability.
Health Reimbursement Arrangements (HRAs)
Not offering group health insurance? No problem. HRAs can allow your business to reimburse employees for individual health coverage tax-free. It’s a cost-effective alternative that still offers meaningful benefits and it can be a game-changer for businesses with just a handful of employees.
Cost Segregation Studies
If you own commercial property, you’re probably depreciating the building over 39 years. But certain assets inside that property like lighting, flooring, and even tech infrastructure can be written off much faster. A cost segregation study identifies those assets and accelerates depreciation, freeing up deductions you’re entitled to but not currently using.
Self-Employed Health Insurance
If you’re paying for your own health insurance (or coverage for your spouse and dependents), don’t forget: it’s fully deductible. This deduction applies even if you don’t itemize. For consultants and small business owners without access to employer plans, it’s a direct, clean win.
Business Meals
Meals with clients or team members where business is discussed? Still only 50% deductible. Just keep a record of the who, what, and why.
Pro Tip:
Digital bookkeeping tools like QuickBooks can help you tag and track expenses properly in real time.
Ready to Maximize Your Deductions? Start Here:
You don’t need to become a tax expert, but you do need a strategy. Here’s what to focus on:
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✅ Work with a CPA who understands your industry and goals.
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✅ Track expenses in real time, not just at tax time.
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✅ Don’t Wait! Making purchases and contributions before December 31.
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✅ Re-evaluate your benefits strategy to include tax-smart retirement and health plans.
Quick-Reference Deduction Checklist (2025)
✔ QBI Deduction — Up to 20% of qualified income (Note: subject to income limits and industry exclusions)
✔ Section 179 + Bonus Depreciation — Deduct up to $1.16M; bonus depreciation at 40% this year
✔ Retirement Contributions — SEP, SIMPLE, and Solo 401(k) deductions
✔ Industry-Specific Write-Offs — Tailored deductions based on your business model
✔ R&D Credits — For product/process/software innovation, even in non-tech industries
✔ HRAs — Health reimbursement options for small businesses
✔ Cost Segregation — Accelerated depreciation on commercial property improvements
✔ Self-Employed Health Insurance — Full deduction for premiums
✔ Business Meals — 50% deductible with proper documentation
Final Thought
Taxes aren’t just about compliance. They’re about strategy. And strategy means looking forward, not backward. If you’re serious about protecting your margins and scaling responsibly, you can’t afford to ignore what’s deductible. If you’re not sure whether you’re getting the full benefit of what’s available, let’s talk. We’ll show you what’s possible when your tax plan works as hard as you do.