10 Ways Starting a Business Can Save You Money on Taxes (And How to Do It)

I started my entrepreneurial journey because I felt called to serve. I spent so much money trying to get traction. It wasn’t until I hired a tax strategist, that I realized how much I could save on taxes, and I'm hoping these tips can help you do the same. Here are 10 tax tips I've learned as I prepare to go from being a W2 employee to becoming a business owner. 

Tip #1: Home Office Deduction

If you have a home-based business, did you know you can write off part of your home as a business expense? For example, if your home office takes up 25% of your house, you can write off a portion of your rent or mortgage, utilities, and even property taxes. Don't forget office-related purchases like furniture or décor. It’s amazing how much you can deduct once you know the rules!

Tip #2: Vehicle Write-Offs

Most of us know about deducting mileage, but did you know you can itemize other vehicle expenses like maintenance, insurance, and even depreciation? It does require keeping detailed records, but with good bookkeeping, the savings can really add up. It’s worth the extra effort to take full advantage of this.

Examples of Actual Expenses You Can Deduct:

• Interest on a vehicle loan

• Vehicle depreciation (leased vehicles cannot be depreciated)

• Registration fees and tax

• Parking fees and tolls

• Garage rent

• Lease payments (an income inclusion amount must be subtracted from the

• amount you can deduct if the vehicle’s value is above a certain amount. This amount changes yearly so be sure to check with the IRS or your

• accountant)

• Insurance

• Gasoline

• Oil

• Maintenance

• Repairs

• Insurance

• Tires

• License plates

• Registration fees

Tip #3: Hiring Family Members

This one was a game changer for me! You can hire family members—yes, even your kids! If your child is under 18, their income may be exempt from payroll taxes. Instead of giving them an allowance, why not put them to work in your business? Whether it's helping with social media or filing paperwork, there are plenty of tasks they can take on.

Tip #4: Travel Deductions

I love this one! If you travel for business, expenses like airfare, lodging, meals, and even rental cars can be written off. To make sure you can deduct the trip, plan some business activities while you're there—attend a conference, meet with a client, or do a business-related demonstration. If you hired your spouse and children, that would make it easier to document the business trip and deduct expenses including:

• Transportation by airplane, train, bus, or car between your home and your

• business destination,

• Taxi, Uber, limo, or shuttle expenses,

• Baggage fees or shipping of work-related materials,

• Car expenses, for use of your own car or a rental car,

• Lodging and meals, if your trip is overnight or long enough that you need to

• stop for sleep or rest,

• Dry cleaning and laundry expenses,

• Business-related phone calls while you are away,

• Other business-related expenses while you are traveling.

 It’s a smart way to combine work with a little leisure!

Tip #5: Depreciation

Depreciation allows you to deduct the cost of big purchases—like vehicles or equipment—over time. For instance, I bought a car and added it to my business. My tax strategist is helping me depreciate it over the next few years, allowing me to spread the deduction and lower my taxes over time.

For example, if a business purchases a $100,000 piece of equipment, I can take the entire $100,000 in year one or deduct $14,286 a year for seven years.

Depreciation calculates how much of an asset's value will be “used up” over these periods of time. 

For example:

• Manufacturing tools and tractors is 3 years.

• Computers, office equipment, light vehicles, and construction equipment is 5 years.

• Office furniture and miscellaneous assets is 7 years.

• Residential real estate is 27.5 years.

• Commercial real estate is 39 years.

• Improvements to land depreciate over periods of 10, 15, or 20 years, with some exceptions.

Tip #6: Tax Credits

Tax credits are often overlooked but can be hugely beneficial. Unlike deductions, which reduce your taxable income, tax credits reduce the actual amount of tax you owe. There are credits available for environmentally responsible actions or even for hiring certain employees. Make sure you’re aware of all the credits you qualify for.

Tip #7: Meal Deductions

This is for those who love eating out! If you meet a client or business partner for a meal and discuss business, you can deduct a portion of the cost. Always document who you met, what was discussed, and keep the receipt. Some accounting apps make this super easy by letting you snap a photo of the receipt and store it for later.

Here are some changes to Meal expenses:

• Meals during entertainment events are deductible if they can be separated out

• Meals for employees while traveling, for all-employee events, or business meals, in general, are still deductible at 100 percent.

• Meals for employees at your location (think cafeteria or break room) are no longer deductible at 100 percent, but only at 50 percent).

• If you have a home-based business and you provide food for the "office", that is also deductible. My tax strategist said to place that under supplies. 

Tip #8: Startup Costs

When I first started my business, I was surprised to learn I could deduct startup costs like initial purchases, legal fees, and even marketing expenses. Plus, those expenses can be deducted for up to 18 months from the start of your business. This helped reduce my taxable income, which in turn lowered my tax bracket.

Tip #9: Education Expenses

Investing in yourself and your business through education is another deductible expense. This includes courses, certifications, or workshops that improve your skills or are required for your industry. There are even free resources available, like the American Small Business Development Center, that can guide you in budgeting, scaling, and developing your business.

To be deductible, you must be able to show that the education:

• "Maintains or improves skills required in your present work."

• It is required by law or regulations for maintaining a license to practice, status, or job. For example, professionals can deduct costs for continuing education.

Tip #10: Professional Help is Worth It

Don’t be afraid to ask for help. Trial and error can cost time and money, so consider hiring a CPA, attorney, or tax strategist. These costs are deductible, and the expertise they provide can save you money in the long run. You can even outsource to freelancers for tasks like bookkeeping or marketing, which frees up your time for higher-value activities.

Bonus Tips: Community Support

Starting a business can feel lonely at times, but building a support network makes a world of difference. Whether it’s Facebook groups, local meetups, or just a trusted circle of like-minded people, having a community will help keep you grounded and motivated. Stay focused on your goals, and remember—entrepreneurship is about problem-solving and creating a better future for yourself and your family.

If you have questions or want to know more, don’t hesitate to reach out! Entrepreneurship is a journey, and it helps to have support along the way.

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