Tax time can make you wonder if you’re missing out on deductions you deserve. Many LLC owners feel uncertain about what they can claim, worried that they’re leaving money on the table with the IRS. Between running your business and juggling daily demands, finding time to figure out IRS rules often gets pushed aside.
You don’t need to become a tax expert to claim these deductions. You just need to know which ones apply and create a few habits to stay on top of them. Here’s how to make sure you’re not missing any money that should be staying in your pocket.
LLC Taxes: The Basics You Should Know
This part can feel stressful, but it doesn’t have to be. LLCs are flexible, so you can choose how your business is taxed: sole proprietorship, partnership, S corp, or C corp. This choice determines which deductions you can claim and how you can claim them.
It matters because your classification affects the forms you file and the rules you follow for deductions. For example, home office deductions work differently for sole proprietorships than for S corps and C corps. If you’re not sure which category you’re in, check last year’s tax return or ask your accountant. It’s worth the time to get this right.
The Deductions Many LLC Owners Overlook
Most business owners remember the obvious deductions like payroll, rent, and insurance. But there are other expenses that often get missed. These can add up to real savings.
Here’s how to make sure you’re not missing them:
- Employee wages, office rent, and insurance are the basics.
- Professional fees, marketing costs, and supplies often get claimed.
- Home office, mileage, and training are areas where many LLCs miss out.
A closer look at these deductions can help you keep more of what you earn.
Can You Deduct Part of Your Home for Business?
A home office doesn’t have to be a whole room. If you use part of your home just for business, you can deduct some of your household expenses.
You can write off a portion of rent or mortgage interest, utilities, and repairs. The IRS offers two ways:
- Simplified method: $5 per square foot, up to 300 square feet.
- Actual expenses: A percentage of real costs based on the space you use.
Taking a photo or drawing a rough floor plan can help you figure out what’s fair to claim. If you’re an S corp, you’ll need to set up a reimbursement plan for yourself.
Is It Worth Tracking Your Business Miles?
Driving for business can be deductible if you keep good records. Commuting doesn’t count, but trips to see clients or go to the bank do.
- You can write off mileage at the IRS rate (67 cents a mile in 2024) or actual vehicle costs.
- Parking fees and tolls also count as business expenses.
- Using a mileage tracking app can make this easier. A spreadsheet works too. Just keep dates, destinations, and distances handy.
Can You Deduct Courses, Conferences, and Training?
If you’re taking classes or attending events to make your current business better, those costs can be deducted. But if it’s a class for something new that’s unrelated, it’s not deductible.
You can claim:
- Webinars and professional certifications
- Industry events and journals
- Books and resources to stay up to date
Add a quick note to each expense to explain how it connects to your business. It helps if you ever need to show proof.
What About Startup Costs?
When you’re launching your LLC, some early expenses can be written off. Startup costs include legal fees, market research, and early advertising.
You can usually deduct up to $5,000 of startup costs in the first year. If your total costs are more than $50,000, you’ll have to spread them out over several years.
Keep all your early paperwork in one place so you don’t miss these deductions later.
Subscriptions and Professional Fees: Do They Count?
Yes, as long as they’re for your business. Deductions include subscriptions to trade journals, online tools, and memberships in professional groups.
Examples include:
- Accounting software or industry apps
- Dues for local business groups
- Professional journals or databases
- Streaming music or movies for your own enjoyment doesn’t count, even if you sometimes play them while you work.
Unpaid Invoices: Can You Deduct Them?
If you report income when you earn it (accrual accounting), you can deduct unpaid invoices as bad debt. You have to show that you already counted this income in a past year and tried to collect. If you use cash accounting, you can’t claim a deduction for money you never received.
Banking, Interest, and Insurance Costs That Slip Through the Cracks
Some of the smallest fees get overlooked. Take a second look at:
- Errors and omissions insurance or cybersecurity insurance
- Interest on business loans and credit cards
- Bank fees and charges from payment processors
Download your year-end bank statements to catch these. They might be small, but they add up fast.
Equipment and Furniture: Can You Deduct It All Now?
Big purchases like computers, furniture, and tools don’t have to be deducted over several years. You can often deduct them right away by using the Section 179 deduction.
- Section 179 deduction: This lets you write off the whole cost in the year you buy it.
- Bonus depreciation: Another option for writing off most of the cost quickly, though it’s going away after 2026.
This can really help if you’re investing in tools or equipment and want to save on this year’s taxes.
How to Keep Good Records and Avoid IRS Headaches
Good records make deductions easier and keep the IRS off your back.
Here’s how to keep it simple and stay organized:
- Separate your business and personal accounts. This makes it easier to prove which expenses are for work.
- Use an app or system to save receipts and track miles. Tools like QuickBooks or Shoeboxed can be a lifesaver.
- Check in on your deductions at least once a month. Small updates are easier than one big panic in April.
When to call in a Pro
You don’t need to be an expert to save money, but some things are easier with a tax professional’s help.
Get help when:
- You’re not sure how your LLC is taxed
- Your income goes way up or down
- You’re expanding to a new state
- The forms start making no sense
Look for a CPA or tax pro who works with small businesses. Don’t fall for promises of giant refunds from someone who won’t stand behind their work.
The bottom line
You don’t have to know every detail of the tax code to make smart choices. It’s about having a plan, keeping clear records, and getting help when you’re not sure.
Here’s what to do next:
- Review your past expenses for missed deductions
- Open a business bank account if you haven’t yet
- Download an app to help with receipts and mileage
- Book a quick chat with a tax pro if you’re unsure
- Put a calendar reminder to check your deductions every few months
You work hard to earn every dollar. Make sure you’re keeping more of it by claiming what’s yours. Every small habit adds up to real savings.
