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Small Business Tax Tips for 2026

7 min readVERDE ONE Financial Insights

Smart tax planning can save your small business thousands. A local CPA shares the deductions and strategies most business owners overlook.

Tax season doesn't have to be stressful — but for most small business owners, it is. The difference between a stressful tax season and a smooth one usually comes down to one thing: preparation. And the difference between paying too much and paying the right amount usually comes down to one thing: working with a local CPA who knows your business.

One of the most overlooked deductions for small business owners is the home office deduction. If you use a portion of your home regularly and exclusively for business, you can deduct a proportional share of your mortgage interest or rent, utilities, and insurance. The IRS simplified method allows $5 per square foot up to 300 square feet — but the actual expense method often yields a larger deduction.

Vehicle expenses are another area where business owners leave money on the table. If you use your personal vehicle for business purposes, you can deduct either the standard mileage rate (67 cents per mile in 2024) or actual vehicle expenses. Keeping a mileage log throughout the year is essential — and easy to do with a smartphone app.

Section 179 expensing allows businesses to immediately deduct the full cost of qualifying equipment and software in the year of purchase, rather than depreciating it over several years. For 2026, the deduction limit is $1.22 million. This is particularly valuable for businesses investing in technology, machinery, or vehicles.

Retirement plan contributions are one of the most powerful tax reduction strategies available to small business owners. A SEP-IRA allows contributions of up to 25% of net self-employment income. A Solo 401(k) allows even higher contributions and includes a Roth option. These contributions reduce your taxable income dollar-for-dollar.

The most important tax tip of all: don't wait until April. Tax planning is a year-round activity. A local CPA who understands your business can help you make decisions throughout the year — timing income and expenses, structuring transactions, and identifying opportunities — that can save you far more than any last-minute deduction.