The Six Tax Deductions Every Owner Misses

Most owners learn about quarterly estimated taxes the same way: an April surprise from their CPA. By then, the deductions that would have cushioned the bill are already gone — because they were never tracked.

These are the six categories that get missed most often.

1. Home office (the right way)

The simplified method gives you $5 per square foot up to 300 square feet — a flat $1,500. The actual-expense method usually beats it by 2x to 3x if you measure your space and prorate utilities, internet, and rent or mortgage interest. The catch: the space has to be used regularly and exclusively for business.

2. The Augusta Rule (Section 280A)

You can rent your personal home to your business for up to 14 days per year, tax-free. Board meetings, strategy retreats, client events — all valid if you document them and pay a market rate. On a $1,500/day rate, that is up to $21,000 of deductible expense to the business that comes back to you as tax-free income.

3. Health insurance premiums

Self-employed owners can deduct 100% of health insurance premiums for themselves, their spouse, and dependents on the front page of the 1040 — not as an itemized deduction. This is above-the-line. Most owners take it; many miss adding dental and vision.

4. Retirement contributions

A SEP-IRA lets you contribute up to 25% of net self-employment income, capped at $69,000 for 2026. A solo 401(k) gets you to the same cap with more flexibility on Roth contributions. You have until your tax filing deadline (including extensions) to fund it.

5. Vehicle expenses

Standard mileage in 2026 is 70 cents per mile for business use. If you drive 10,000 business miles — not unusual for an active owner — that is a $7,000 deduction. The IRS wants a log: date, destination, purpose, miles. Apps like MileIQ do this automatically.

6. Startup costs

You can deduct up to $5,000 of startup costs in your first year of operations, plus another $5,000 of organizational costs. Anything above gets amortized over 15 years. Most first-year owners do not realize they can capture costs incurred BEFORE the business legally existed — market research, legal consultation, initial branding.