A deduction reduces income that may be taxed. It does not reimburse a purchase dollar for dollar, and two businesses with the same expense can receive different tax benefits.
These ten areas are worth reviewing against your 2026 books. Start with expenses you actually incurred and plans you can fund. The goal is a supported return and a deliberate cash plan, not a bigger spending list.
1. Retirement plan contributions
Compare a SEP, SIMPLE and 401(k) using your employee roster, owner compensation and sustainable contribution budget. An owner-only plan is not an option for a business that must cover eligible employees.
In 2026, the ordinary 401(k) employee deferral limit is $24,500. The combined defined-contribution cap is $72,000 before eligible catch-ups, but compensation can produce a much lower limit. Self-employed employer contributions use adjusted earnings, not 25% of unadjusted Schedule C profit. IRS 2026 limits and Publication 560.
Bring to the review: payroll totals, employee ages and service dates, other employer plans, and the amount of cash you can leave invested. See the retirement plan comparison.
2. Self-employed health insurance
Eligible owners may deduct qualifying premiums, subject to earned-income and coverage restrictions. Months when you were eligible for subsidized coverage through your or your spouse’s employer can affect eligibility.
More-than-2% S-Corp shareholders need company payment or reimbursement and appropriate W-2 reporting. Do not route these premiums through an ordinary tax-free expense reimbursement and assume the result is correct. IRS Form 7206 instructions.
Bring to the review: policyholder details, premium records, coverage months, payroll reports and other employer coverage available to the household.
3. A qualifying home office
The space generally must be used regularly and exclusively for business and satisfy a qualifying-use test. Occasional paperwork at the kitchen counter does not establish a dedicated office.
Eligible sole proprietors can compare allocated actual expenses with the simplified method: generally $5 per square foot, up to 300 square feet, subject to the income limitation. Mortgage principal is not deductible housing expense. Corporate employees need to evaluate reimbursement treatment separately. IRS Publication 587.
Bring to the review: measurements, a floor plan, the work performed there and eligible housing expenses.
4. Vehicle expenses
For eligible 2026 business driving, the standard mileage rate is 72.5 cents through June 30 and 76 cents from July 1. Actual-expense treatment may be an alternative, depending on prior elections and vehicle facts. IRS mileage table.
Do not claim mileage plus the fuel, repairs, insurance and depreciation already represented by that rate. Personal travel and ordinary commuting are excluded; the home-office and temporary-work-location rules require a facts-based review. IRS Topic 510.
Hypothetical: 5,000 qualifying miles in each half of 2026 produce $3,625 plus $3,800, or a $7,425 mileage expense. That is not $7,425 of tax savings.
5. Equipment depreciation and Section 179
For 2026, Section 179 has a $2,560,000 overall limit, with phase-down beginning when qualifying purchases exceed $4,090,000. Taxable-income, business-use and vehicle limits still matter. Eligible property acquired and placed in service after January 19, 2025 can qualify for 100% bonus depreciation. 2026 annual limits and depreciation rules.
Bring to the review: the invoice, financing documents, business-use records and the date the equipment became ready and available for work. Compare keeping cash with accelerating a purchase. A deduction does not make unnecessary equipment profitable.
6. The qualified business income deduction
QBI can provide a deduction of up to 20% of eligible income from qualifying pass-through activity. It continues after 2025, but its calculation depends on more than the business’s bottom line.
Taxable income, filing status, business type, wages, qualifying property and capital gains can limit the deduction. Owner W-2 wages are not QBI. Contributions or other deductions can also change the amount of QBI, so individual strategies should not be added as if they were independent. IRS QBI overview.
Bring to the review: the complete household income picture, not just a business profit report.
7. Meals and entertainment
Keep qualifying business meals separate from entertainment. The ordinary meal deduction is generally 50%; entertainment usually has no deduction. Certain employee recreation expenses have exceptions, and some employer-provided meals became nondeductible in 2026 unless an exception applies. IRS Publication 463 and Publication 15-B.
Bring to the review: itemized receipts, attendees, business purpose and any separately stated food charges. A business discussion during an entertainment outing does not make the whole outing deductible.
8. Work-related education
Education can qualify when it maintains or improves skills needed in your current work. Minimum-entry education and training for a new trade or business generally do not qualify under this rule. IRS Topic 513.
Bring to the review: course descriptions and a short explanation of how the learning relates to your existing responsibilities. Separate personal-interest courses and family travel from business training costs.
9. Family members who genuinely work in the business
A spouse or child needs real duties, reasonable pay and employment records. The treatment is not determined by the family relationship alone. Special Social Security and Medicare exceptions for a parent’s child under 18, and FUTA exceptions under 21, depend on the entity arrangement; corporate employment does not receive those same exceptions. IRS family-employment rules.
Bring to the review: job descriptions, hours, rate support, payroll records and applicable labor-law requirements. There is no universal age-seven tax rule, and a dependent does not have an unlimited tax-free earnings allowance.
10. The employer-equivalent portion of self-employment tax
Schedule SE computes self-employment tax, generally using 92.35% of net earnings before applying the relevant Social Security and Medicare rules. A separate deduction for the employer-equivalent portion can reduce income subject to income tax. It does not reduce the self-employment tax itself. IRS Topic 554.
Hypothetical: at $100,000 of Schedule C profit, with no other wages or Additional Medicare Tax, regular self-employment tax is approximately $14,129.55 before form rounding. The employer-equivalent deduction is approximately $7,064.78. Neither figure is an assumed savings opportunity from hiring an advisor.
Review the combined result
A useful projection reconciles the deduction list to the books, includes household income and compares the current year with later years. It also separates cash you must spend from deductions for expenses already incurred.
Put an owner, supporting document and decision date beside each open item. Use the full deductions guide for deeper explanations. The examples here are hypothetical and are not client results.
Frequently asked questions
Does a deduction refund the full expense?
No. A deduction reduces taxable income. Its effect depends on the complete tax calculation, eligibility and whether it is usable in the current year.
Can I claim mileage and vehicle operating costs?
You cannot separately deduct fuel, maintenance, insurance and depreciation already represented by the standard mileage rate. Some eligible costs, such as business parking and tolls, can be separate.
Put the review to work
Use the current rules and your own records to identify decisions that need a closer look. Eligibility, timing and the combined tax calculation determine the result.