Tax Deductions List: 77 Items You May Be Able to Write Off

You could save a bundle this year by carefully considering your business expenses for tax deductions.

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Benjamin Franklin said it best when he coined the phrase, "a penny saved is a penny earned." Many business owners take years to understand that taxes are one of their biggest costs, and it doesn't take much effort to ensure you're saving the most possible money.

Make sure you have a regular conversation with your tax preparer to discuss these items and learn what type of taxpayer you are (read more later about different types of taxpayers). Knowing this can determine specific benefits and opportunities to save. Use this list as a discussion point and ensure the right person is helping you with your taxes.

What are tax deductions?

Tax deductions, a vital component of the income tax system, are amounts subtracted from your gross income, thereby lowering your taxable income. Essentially, they decrease the amount of income on which you're taxed, ultimately reducing your tax liability.

Different types of deductions exist, and understanding them can be crucial in lessening your tax bill and potentially increasing your tax refund.

Above-the-line vs. below-the-line deductions

A good CPA should teach their clients to think above the line — that is, the Adjusted Gross Income (AGI) line. The AGI is the number in the bottom right-hand corner on the front page of any tax return, and it's essentially the base income on which you are taxed. By "thinking above the line," you can deduct business expenses upfront in addition to your available below-the-line deductions.

Above-the-line deductions

These deductions happen before calculating your AGI, and they can include any personal expenses that have a business purpose. By deducting these expenses from your income, you report earning less to the government, which lessens your tax burden. Common above-the-line deductions include health insurance premiums, IRA contributions, student loan interest, health savings account contributions and educator expenses.

Below-the-line deductions

After using above-the-line deductions and calculating your adjusted gross income, you can continue to ease your tax burden with below-the-line deductions. Taxpayers have two options once they get below the line: a standard deduction or an itemized deduction.

Standard deduction

This is a blanket amount offered by the Internal Revenue Service (IRS) that most taxpayers can take advantage of. You can deduct the standard deduction total — in 2024, that's $14,600 for single taxpayers and up to $29,900 for a married couple filing jointly — from your AGI to lower your tax burden. If your finances are relatively straightforward and limited, a standard deduction will be most beneficial.

Itemized deduction

If you're spending lots of money on things like mortgage interest, medical expenses, state taxes, property taxes and charitable giving, your expenses might exceed those of a standard deduction. In that case, you can itemize your deductions to save even more money. Consult a CPA or tax professional to ensure you're submitting truthful returns, but taking advantage of itemized deductions can save you thousands of dollars annually.

77 possible tax deductions

Consider this list of more than 70 possible tax deductions for business owners. It's just a start, and not every one of these items is always a viable deduction. But it's a jumping-off point to begin a discussion with your tax professional.

What are the different types of taxpayers?

The U.S. tax system recognizes several types of taxpayers, each with its unique circumstances and potential tax benefits. Understanding these categories is essential for properly managing tax liability and taking advantage of available tax breaks.

Individuals

These are the most common taxpayers, often earning income from wages, salaries and tips. They might also have investment income, such as interest, dividends and capital gains. This group should even include winnings from gambling, which are considered taxable income. Any gambling losses can be itemized as deductions to offset those winnings.

Individual taxpayers can use standard or itemized deductions and may be eligible for tax credits such as the Earned Income Tax Credit or the Lifetime Learning Credit. These deductions and credits can considerably reduce their federal income tax liability.

Self-employed

Self-employed taxpayers run their businesses. They could be freelancers, contractors, small business owners, or individuals making money from a side hustle. In addition to standard or itemized deductions, they can access business deductions that lower their taxable income.

These include business travel expenses, home office deductions and equipment costs. They also pay self-employment tax, which covers Social Security and Medicare taxes, but half of this amount is deductible. Furthermore, if they pay for their own health insurance premiums, these costs can also be deducted.

Homeowners

Homeowners may be eligible for deductions that can significantly lower their taxable income. These include deductions for mortgage interest and real estate taxes.

Homeowners in states with high sales tax rates might find deducting their sales taxes more beneficial than state income tax. They may also be eligible for expense deductions for certain energy-efficient home improvements.

Retirees

Individuals who are retired have unique tax considerations. Depending on their income level, some Social Security benefits may be taxable.

Retirees can also deduct medical expenses exceeding a certain percentage of their adjusted gross income, which could include health insurance premiums. Additionally, they may be eligible for tax credits that assist with dependent care expenses.

Students

Students or their parents can be eligible for several education-related tax benefits. These may include the American Opportunity Credit or the Lifetime Learning Credit, which can significantly reduce federal income tax liability.

Student loan interest can also be tax-deductible, effectively lowering the overall expense of education.

Start saving on your taxes

Surprisingly, there isn't some master list included in the Internal Revenue Code or provided by the Internal Revenue Service. There is simply the tax principle, set forth in Code Section 62, which states that a valid write-off is any expense incurred in producing income. Each deduction then has its own rules.

Seasoned business owners have become proficient over the years at keeping good records and realizing when expenses have a legitimate business purpose. For some, this thought process becomes so ingrained that it becomes almost impossible to buy something without first considering a tax purpose for that item or service.

In sum, try to track every single expense related to your business and comb over them with your CPA at the end of the year to ensure you only take legitimate deductions. Good record-keeping and thoughtful consideration will minimize your risk of an audit if the IRS ever comes knocking.