6 Surprising Business Expenses You Can Deduct at Tax Time

When tax season rolls around, one of the biggest questions business owners have is: “What can I actually deduct?”

The truth is, as a business owner, you can deduct any expense that goes toward operating, growing, or improving your business. And the more you deduct, the less you’ll owe in taxes. Win-win.

Most people already know about the usual deductions—things like office supplies, mileage, and your home office. But there are a handful of overlooked expenses that often fly under the radar.

Here are six deductions you might not realize you can claim.

1. Professional Development

That course you took to sharpen your skills? Deductible. The business coach you worked with to help you grow? Deductible.

Professional development is all about making you better at what you do—and that means it qualifies as a business expense. This can include:

• Courses or coaching programs

• Educational memberships or subscriptions

• Industry-related books or audiobooks

  
  

Bookkeeping tip: If you pay a coach or consultant more than $600, you’ll need a 1099 form for them at year-end. Ask for a W-9 up front so you’re not scrambling later.

2. Merchant Fees

Those pesky PayPal, Stripe, or Shopify fees add up fast—but here’s the good news: they’re deductible.

For example, if you invoice $1,000 and Stripe only deposits $950 into your account, that $50 fee counts as a business expense. It’s the cost of getting paid, and the IRS recognizes it.

3. Your Cell Phone Bill

If you use your personal phone for business (calls, client emails, social media, etc.), you can deduct part of your bill.

The key is figuring out what percentage of your usage is business-related. For instance, if 25% of your phone time is spent working, you can deduct 25% of your phone plan cost.

Bookkeeping tip: Do a quick time audit over a few days to get an accurate estimate of your business vs. personal use.

4. Client Gifts

Love surprising your clients with thoughtful gifts? The IRS lets you deduct up to $25 per client, per year.

So, if you send a $40 bouquet, you can deduct $25 and cover the rest yourself. It’s still worth it—happy clients tend to stick around and send referrals.

Bookkeeping tip: The same $25 rule applies to employee gifts too.

5. Branded Clothing

If you’ve invested in apparel with your logo, like t-shirts, hoodies, or polos, that counts as advertising, and it’s deductible.

Here’s the rule of thumb: if you wore it in public, could a stranger clearly tell what your business does? If yes, it qualifies.

(But no, your everyday leggings, jeans, or plain workout gear don’t count—sorry!)

6. Hair + Makeup for Brand Photoshoots

If you had your hair or makeup professionally done for a brand photoshoot, you can deduct that cost (including the tip).

The photoshoot itself is also deductible; just make sure you get a commercial release from your photographer so you have permission to use the images for business.

Clothing for the shoot, however, doesn’t qualify since you can wear it again outside of work.

At Pretty Penny, we believe tax time doesn’t have to feel overwhelming or full of guesswork. At the end of the day, managing your business finances doesn’t have to feel like a constant uphill climb. With the right systems in place and a little bit of clarity around where your money is going, you can trade the stress for confidence and start making decisions that actually support your goals.

Remember, every small step you take adds up.

P.S. Don’t leave without this freebie—if you’re ready to feel more confident about your business finances, grab The Ultimate Accounting Checklist. It’s your go-to guide for tracking expenses, spotting tax deductions, and building smarter money habits. Click here to download it and start simplifying your money today.

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