Understanding Tax-Deductible Expenses for Small Businesses and Non-Profits

Running a small business or non-profit comes with many responsibilities—but tax season doesn’t have to be a stressful one. One of the best ways to prepare is by understanding which expenses you can legally deduct from your taxes. At EBS, we’re here to take the stress off your shoulders by filing your taxes for you. But before we do that, let’s make sure you’re keeping track of the right expenses.

Here’s a quick guide to some of the most common tax-deductible expenses that could help reduce your taxable income and keep more money in your pocket (or your mission).

1. Advertising and Promotion

Marketing your business or nonprofit? Good news—those expenses are usually 100% deductible!

Some examples of deductible promotional costs include:

• Hiring a graphic designer to create your logo

• Building or revamping your website

• Running ads on social media or search engines

• Printing business cards, flyers, or brochures

If it helps spread the word about your business or cause, it’s likely deductible.

2. Bank and Payment Processing Fees

Using a separate business bank account is not only a smart move for bookkeeping—it can also offer tax benefits.

You can deduct fees such as:

• Monthly bank service charges

• Credit card annual fees

• Overdraft or transfer fees

• Transaction fees from platforms like PayPal, Stripe, or Square

Every little bit counts, so keep an eye on those statements!

3. Depreciation of Equipment and Assets

Big purchases like office furniture, computers, and equipment are essential—but they don’t have to be a financial burden. While you can’t always deduct the full cost right away, you can often recover the expense over time through depreciation.

But there’s good news: the IRS offers a few shortcuts that allow many small businesses to deduct more, faster:

• De minimis safe harbor: You can write off items under $2,500 per invoice or item in the year of purchase.

• Section 179 deduction: Deduct up to $1,250,000 in qualifying equipment or software.

• Bonus depreciation: Deduct 100% of certain qualified assets in the year you buy them.

We can help you figure out which method makes the most sense for your business.

4. Education and Training

Investing in your knowledge (or your team’s) can be both rewarding and tax-smart. If the training directly relates to your current work or improves your skills, it’s typically deductible.

Examples include:

• Online courses or webinars in your field

• Workshops or professional development seminars

• Subscriptions to industry publications

Learning pays off in more ways than one!

5. Contract Labor

Do you hire freelancers, consultants, or independent contractors? Their fees are fully deductible as business expenses.

Just make sure to keep good records—and issue a Form 1099-NEC to any contractor you paid $600 or more during the year.

6. Home Office Deduction

Working from home? You might qualify for a home office deduction, as long as your space is used exclusively and regularly for business purposes.

There are two ways to calculate it:

• Simplified method: Deduct $5 per square foot of your office space (up to 300 square feet).

• Standard method: Calculate actual expenses like mortgage interest, utilities, internet, and repairs, then deduct the portion that relates to your office.

Whether it’s a spare bedroom, a garage, or a cozy corner—if it’s your business HQ, it might be deductible.

Final Thoughts

Understanding what you can deduct is a great first step toward smarter financial planning. But you don’t have to go it alone. At EBS, we’re here to make tax season simple, smooth, and stress-free.

Let us help you get every deduction you deserve—so you can stay focused on growing your business or making a difference.