Running a small business comes with plenty of expenses. The question at tax time is: Which of those expenses can actually reduce your taxable business income?

Many Wisconsin business owners know about obvious deductions such as advertising, employee wages, and office supplies. But other legitimate business expenses can be easier to overlook—especially if bookkeeping isn’t kept up throughout the year.

Here are 10 areas small-business owners should review when preparing their taxes.

Important: A business expense generally needs to meet applicable tax requirements to be deductible. Your ability to claim a particular deduction depends on your circumstances, so this list should be used as a starting point rather than a substitute for individualized tax advice.

1. Business Mileage and Vehicle Expenses

If you use your personal vehicle for business, those miles may create a tax deduction.

Potential business driving could include trips to:

• Meet clients
• Visit vendors
• Purchase business supplies
• Attend conferences or training
• Travel between business locations
• Make deliveries
• Perform other business-related tasks

However, simply driving from home to your regular place of business is generally considered commuting rather than deductible business mileage.

Depending on your circumstances, you may be able to use the standard mileage method or deduct the business portion of actual vehicle expenses.

The bigger issue we see is often recordkeeping.

Trying to reconstruct an entire year’s worth of business driving at tax time can be difficult. Keeping a mileage log throughout the year makes substantiating business use much easier.

2. Home Office Expenses

If you’re self-employed and regularly use part of your home exclusively for your business, you may qualify for a home-office deduction.

Depending on the method used, potentially relevant expenses can include a portion of:

• Rent
• Mortgage interest
• Real estate taxes
• Utilities
• Homeowners or renters insurance
• Repairs
• Depreciation

There is also a simplified method that may be available.

One important word here is exclusively.

Working from your kitchen table occasionally doesn’t necessarily turn your kitchen into a deductible home office.

But if you have a qualifying space used regularly and exclusively for your business, it’s worth discussing with your tax professional.

3. Your Cell Phone and Internet

Do you use your personal phone for business?

What about your home internet?

If they’re used for both personal and business purposes, you generally can’t simply deduct the entire bill. But the portion attributable to legitimate business use may potentially be deductible.

For example, a business owner might use a phone to:

• Communicate with customers
• Answer business emails
• Manage appointments
• Process payments
• Post business content
• Access business software

The same principle can apply to internet service.

The key is determining and documenting a reasonable business-use portion.

4. Software and Online Subscriptions

Modern businesses can accumulate dozens of recurring subscriptions.

Individually, they might not seem significant. Added together over an entire year, they can represent a meaningful business expense.

Think about things like:

• Accounting software
• CRM software
• Scheduling tools
• Cloud storage
• Website hosting
• Domain registrations
• Email platforms
• Design software
• Project-management tools
• Industry-specific software
• Payment-processing services
• Video-conferencing tools
• Cybersecurity products

A useful exercise is reviewing your business bank and credit-card statements for recurring charges.

You may be surprised how many legitimate business subscriptions you’ve accumulated.

5. Professional and Continuing Education

Some education expenses related to maintaining or improving skills used in your existing business may potentially qualify as business expenses.

Examples could include:

• Professional conferences
• Industry seminars
• Continuing education
• Professional publications
• Certain courses
• Industry memberships

There are limitations, particularly when education qualifies you for a new trade or business rather than maintaining or improving skills in your existing one.

But don’t automatically assume education expenses are personal.

If you’re paying for training directly related to your current business, keep the documentation and discuss it with your tax professional.

6. Professional Fees

Small-business owners frequently hire other professionals to help operate their businesses.

Potential deductible expenses may include qualifying fees paid to:

• Accountants
• Bookkeepers
• Attorneys
• Payroll providers
• Business consultants
• IT professionals
• Marketing agencies

Some professional fees require different tax treatment depending on what the professional was hired to do, so not every payment is necessarily deducted in the same way.

Still, these are expenses worth tracking carefully.

And yes, tax preparation fees attributable to your business may also be relevant.

7. Business Insurance

Insurance is another category that’s easy to overlook because many policies are paid annually rather than monthly.

Depending on your business, you may have:

• General liability insurance
• Professional liability insurance
• Commercial property insurance
• Cyber insurance
• Workers’ compensation insurance
• Commercial auto insurance
• Other business-specific coverage

Qualifying premiums for insurance protecting your trade or business may generally be deductible business expenses.

If you’ve added or changed coverage during the year, make sure those premiums make it into your bookkeeping.

8. Business Meals

Business meals are one area where it’s important to distinguish between “I bought food” and “I incurred a qualifying business meal expense.”

Depending on the circumstances, a qualifying business meal may be partially deductible.

Good documentation should identify things such as:

• The date
• Amount
• People involved
• Business relationship
• Business purpose

Simply putting a restaurant charge on your business credit card doesn’t automatically make it deductible.

Documentation matters.

9. Retirement Contributions

This one is bigger than saving a receipt for an office chair.

Business owners may have access to retirement-plan options such as:

• SEP IRAs
• SIMPLE IRAs
• Solo 401(k)s
• Employer-sponsored 401(k) plans

Depending on the plan and your circumstances, contributions can potentially provide substantial tax benefits while helping you save for retirement.

This is also a perfect example of why tax planning should happen before tax preparation.

The appropriate plan can depend on factors including:

• Business structure
• Income
• Employees
• Desired contribution amount
• Cash flow
• Long-term goals

Waiting until you’re preparing your return can limit some of the options available to you.

10. Equipment and Business Purchases

Computers, furniture, machinery, tools, cameras, and other equipment purchased for your business may potentially provide tax deductions.

But the tax treatment isn’t always as simple as:

“I bought it, so I deduct the whole thing.”

Depending on the asset and circumstances, a purchase might be:

• Deducted currently
• Depreciated over time
• Eligible for special depreciation treatment
• Partially deductible based on business use

This becomes particularly important when considering a large purchase near year-end.

Don’t Buy Something Just for the Tax Deduction

This is worth emphasizing.

Spending $10,000 unnecessarily to generate a tax deduction doesn’t put $10,000 back in your pocket.

A deduction generally reduces taxable income. It isn’t a dollar-for-dollar reimbursement of what you spent.

If the business actually needs the equipment, the tax consequences can be part of deciding when to purchase it.

But taxes shouldn’t turn an unnecessary purchase into a good business decision.

Bonus: Don’t Forget Your Estimated Tax Payments

Estimated tax payments aren’t a business deduction, but they’re something self-employed taxpayers frequently need to track.

If you’ve made quarterly payments to the IRS or Wisconsin Department of Revenue, keep a record of the date and amount of each payment.

Missing one when preparing your return could make it appear that you owe more than you actually do.

The Bigger Problem: Missing Expenses Usually Starts With Bookkeeping

Most overlooked deductions aren’t caused by some secret section of the tax code.

They’re often caused by poor records.

For example, maybe you purchased something for the business using a personal credit card. Or paid an annual subscription and forgot about it. Or drove hundreds of business miles without keeping a mileage log.

By the time you’re preparing your tax return months later, those expenses are much harder to identify.

That’s why business owners should consider:

• Maintaining separate business accounts
• Using dedicated business credit cards
• Keeping receipts
• Tracking mileage throughout the year
• Categorizing transactions regularly
• Reconciling accounts
• Reviewing financial statements periodically

Good bookkeeping doesn’t just make tax preparation easier.

It gives you better information for running your business.

Tax Deductions vs. Tax Planning

Finding every legitimate deduction is important.

But there’s a limit to what your tax preparer can accomplish after the year has already ended.

Some of the most valuable tax decisions require planning before December 31 or before other applicable deadlines.

Depending on your circumstances, planning conversations might include:

• Whether your current business structure still makes sense
• Whether an S corporation election should be considered
• Retirement-plan contributions
• Equipment purchases
• Employee benefits
• Estimated tax payments
• Tax withholding
• Timing of income and expenses
• Charitable giving
• Other business-specific strategies

That’s the difference between asking:

“What can I deduct from last year?”

and:

“What should I be doing this year?”

Both questions matter.

Tax Help for Wisconsin Small-Business Owners

At La Crosse Tax, we help Wisconsin business owners with tax preparation and proactive tax planning.

Our goal is to make sure your return accurately reflects what happened while also helping you identify tax issues worth addressing before another year passes.

If you’re wondering whether you’re missing deductions—or whether there are larger tax-planning opportunities within your business—we can help you review the complete picture.

Want to talk about your business taxes?