Finance Forward Blog

Each year, clients send us their tax information, and as we review it, a familiar pattern shows up. We follow up with a few clarifying questions, and that’s often when someone realizes there was an expense they didn’t think to include.

In almost every case, nothing was done incorrectly. The issue is usually that certain expenses don’t feel important enough to bring up, or they fall into a gray area people assume doesn’t count. Without clear guidance or a reliable way to track expenses during the year, those details get lost.

This post reflects trends we see across many returns. The goal isn’t to memorize tax rules, but to understand how deductions influence your overall tax picture so you have a better sense of what’s worth tracking and flagging.

Where Deductions Come Into Play

Deductions influence your taxes earlier in the process than most people realize. They change the income figure your return is built on, rather than adjusting the final amount owed at the end. Because of that, their impact isn’t always obvious in isolation. Over time, however, those adjustments can make a noticeable difference.

How Deductions Differ From Credits

When clients ask about the difference, we usually frame it this way:

• Deductions affect the income used in the tax calculation

• Credits apply after that calculation is complete

Credits are easier to spot because they show up clearly at the end, whereas deductions tend to work quietly in the background.

Standard Deduction vs. Itemizing (and Why Business Owners Get Tripped Up)

When filing a personal return, you either take the standard deduction or itemize personal expenses.

Most people take the standard deduction because it’s straightforward and often larger than their itemized total. For 2026, the standard deduction is $16,100 for individuals, $32,200 for married filing jointly, and $24,150 for heads of households. Itemizing only makes sense when certain personal expenses exceed that amount.

Important Clarification

This decision does not affect business deductions. Legitimate business expenses are claimed separately, regardless of whether you itemize or take the standard deduction.

Business deductions are reported as part of your business activity, not as personal deductions. For example:

• Sole proprietors and single-member LLCs report business income and expenses on a separate business section of their return

• Partnerships and S corporations report expenses at the business level before income passes through to the owner

Because of this, business expenses reduce business income before personal deductions ever come into play. That’s why choosing the standard deduction does not mean your business expenses “don’t count.”

This distinction is often missed, and it’s one of the reasons business owners stop tracking expenses they should absolutely be capturing.

Deductions We Commonly See Overlooked

Below are categories that come up repeatedly in real client conversations.

Home Office Expenses

One deduction that often gets overlooked is the home office deduction, especially for clients who work from home a lot but aren’t sure if they qualify.

We go into more depth in our full guide on the home office deduction for small business owners.

Business Mileage

Mileage is another one of the most commonly missed deductions. Clients often remember long trips but forget short, routine drives, such as meeting a client nearby, going to the bank, or picking up supplies. Over time, those miles add up, but only if they’re tracked.

Software and Subscriptions

Many business owners rely on digital tools every day but don’t think to review them from a tax perspective. Accounting software, scheduling tools, design platforms, cloud storage, and communication tools may all be deductible when they support business operations.

Professional Fees

Another area we see overlooked is professional support. Think fees paid for bookkeeping, tax preparation, legal services, or consulting. These expenses are typically considered part of the cost of running a business.

Education and Continuing Learning

Training that helps maintain or improve skills related to your current work may qualify. Courses, conferences, certifications, and required continuing education are common examples. Education related to entering a new field, however, generally does not apply.

Health Insurance for the Self-Employed

Health insurance premiums are frequently missed by self-employed individuals. Depending on the situation, premiums paid for yourself and eligible family members may qualify. The rules are specific, which is why this area often requires a closer look.

Business Meals

Meals tied to business activity are another area where details matter. Client meetings, networking conversations, and meals while traveling for work may be deductible when properly documented. Missing records are one of the most common reasons this deduction gets lost.

Why Tracking Matters More Than Memory

Most missed deductions go back to a lack of a process to track them. Trying to reconstruct expenses months later almost always leads to gaps. Clients who track expenses consistently throughout the year tend to capture more deductions and experience far less stress at tax time.

The good news is that tracking doesn’t have to be complicated—it just has to be consistent. Different systems work for different people, and the “best” one is usually the one you’ll actually use.

Here are a few common approaches we see work well:

• A dedicated business bank account and credit card: This is the foundation. Keeping business and personal spending separate makes it much easier to identify deductible expenses and reduces cleanup later.

• Spreadsheets or simple logs: Some business owners prefer a basic spreadsheet to record expenses or mileage. This can work well if it’s updated regularly and backed up with receipts.

• Bookkeeping software: Accounting software can automate much of the process by pulling in transactions directly from your bank and credit card accounts. This is especially helpful as transaction volume increases.

• Digital receipt storage: Saving receipts electronically—whether in a shared folder, a bookkeeping app, or attached to transactions—can make documentation easier to find if questions come up later.

• Mileage tracking tools: Using an app (such as MileIQ) or log to record mileage as it happens is far more reliable than trying to estimate it at year-end.

No matter the method, the goal is the same: capture expenses close to when they happen and keep enough detail to understand what the expense was for. A simple, repeatable system almost always beats a perfect one that never gets used.

Final Thoughts

The deductions we uncover most often aren’t hidden or aggressive—they’re simply ordinary expenses that were never brought up. If you’re unsure what you should be tracking or whether you’re missing opportunities, let’s talk about it! Current clients are always welcome to email our team, and prospective clients can reach out on our contact page.