Episode 3: What's Really Tax Deductible | Small Biz Matters with Michelle

If you have ever looked at a purchase and thought, can I write that off, you are not alone. Small business owners hear a lot of advice online about tax deductions, and honestly, some of it is flat-out wrong.

Social media has made tax deductions sound like a free-for-all, but that is not how this works. The truth is, there are legitimate tax deductions that can save your business real money. But there are also plenty of expenses that are personal, partially deductible, or too poorly documented to survive scrutiny.

If you want to lower your tax bill the right way, you need clarity, not internet myths. That is what this episode is really about.

The Rule That Matters Most

When it comes to tax deductions, the basic rule is that a business expense generally needs to be ordinary and necessary for your business. That means:

That does not mean extravagant. That does not mean personal. And it definitely does not mean “I mentioned my business while I was there, so now it counts.”

Common Business Expenses That Are Often Deductible

Home Office

If you use part of your home regularly and exclusively for business, you may qualify for a home office deduction. The key words are regularly and exclusively.

Mileage and Vehicle Use

If you drive for business purposes, that may be deductible. But commuting from home to your regular office is generally not business mileage.

Meals

Business meals can be deductible in some situations, but not every lunch you eat between meetings qualifies.

Travel

If you travel for business, costs like airfare, hotels, and transportation may be deductible. But separate the personal portion.

Supplies, Software, Professional Services, Marketing

Office supplies, bookkeeping software, professional fees, website expenses, and promotional costs are commonly deductible business expenses.

Expenses That Usually Are Not Deductible

• Clothing: Regular clothing is usually not deductible, even if you wear it for work
• Personal Grooming: Haircuts, makeup, nails are generally personal expenses
• Personal Meals: Talking about work over dinner does not automatically make it deductible
• Your Own Labor: You cannot deduct the value of your own time

The Gray Areas That Need Extra Care

Cell phone, internet, mixed-use travel, vehicle expenses, and home-related expenses all live in the middle. Documentation and reasonable allocation matter.

Documentation Is What Protects You

• Receipts and invoices
• Bank or credit card records
• Mileage logs
• Notes about business purpose
• Calendars or meeting records when relevant

How to Make Tax Deductions Easier All Year

• Separate business and personal spending
• Keep digital records as you go
• Use bookkeeping software consistently
• Ask questions before you assume

Final Thoughts

Tax deductions can absolutely help lower your tax bill, but only when they are legitimate, documented, and tied to your business properly. The smartest move is to build strong habits now so tax season feels a whole lot less stressful later.

Ready to get your tax strategy sorted? Book a free discovery call with Lighthouse Business & Risk Solutions and let's make sure you're claiming what you're entitled to — and nothing more.