7 LLC Tax Write-Offs to Lower Your Bill

Key Takeaways

• Your LLC is a pass-through entity, meaning business deductions directly lower your personal income tax bill.
• Track every business mile at the current IRS rate of 67 cents to save $670 for every 1,000 miles driven.
• Home office deductions require a space used exclusively for business, usually calculated by square footage.
• Startup costs up to $5,000 can often be deducted in your first year if your total setup costs are $50,000 or less.

In October 2023, a solo graphic designer in Georgia realized she had paid $2,400 too much in estimated taxes. She forgot to track her software subscriptions and the 15% of her apartment used for work. These small misses add up to big checks sent to the government that you could have kept for your own growth.

Recent reporting from Small Biz Trends on LLC deductions highlights that many owners leave money on the table simply because they don't know what counts. If you're a Single Member LLC, the IRS sees you and your business as one unit. Every a dollar your business spends on 'ordinary and necessary' expenses is a dollar you don't have to pay personal income tax on. You can find the full list of allowed expenses in IRS Publication 535.

Phase 1: The Basics (Do these today)

• Open a second bank account for LLC expenses only.
• Link your business card to an app like QuickBooks.
• Save digital receipts for every purchase over $75.
• Measure your home office square footage with a tape.
• Check if your phone plan is in the LLC name.

Phase 2: Monthly Upkeep

• Log your business odometer readings every Monday morning.
• Note the business purpose on every meal receipt.
• Pay your annual state filing fees from the business.
• Categorize your 'cost of goods' versus 'office supplies'.

Phase 3: The Tax Call

• Ask your CPA about the Qualified Business Income (QBI).
• Verify you're taking the 20% pass-through deduction.
• Confirm your health insurance premiums are deducted correctly.

What counts as a deduction?

Many new owners get nervous about what the IRS considers 'ordinary and necessary.' Think of it this way: if a reasonable person in your industry needs it to make money, it's usually a write-off. An HVAC tech needs a van and wrenches. A consultant needs a laptop and a Zoom (Disclosure: we may earn a commission if you sign up through our links.) subscription. If you're ever unsure, check the official IRS guide on business expenses.

Do I need to keep paper receipts for five dollars? Technically, the IRS doesn't require receipts for expenses under $75. But a bank statement alone isn't always enough proof if you get audited. Take a photo of the receipt on your phone. It takes three seconds and protects you from a headache later. If you're struggling with the transition from employee to owner, check out Solo to LLC: Stop Risking Your Home Before Your First Sale for a breakdown on protecting your assets.

This week, take twenty minutes to look at your bank statements from last month. Did you pay for a LinkedIn subscription out of your personal pocket? That's a missed deduction. Fix it now so you aren't scrambling in April.

Which of these items have you been paying for with your personal debit card?

Related free tool

Quarterly Estimated Tax Estimator — Get your per-quarter number in 60 seconds. Free, no signup to start.

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📋 Disclaimer

This article is for informational purposes only and does not constitute legal, tax, financial, or professional advice. Laws and regulations change frequently, and the information presented may not reflect the most current legal developments. Always consult with a qualified professional (CPA, attorney, financial advisor) before making business decisions based on this content. MyBizNerd may receive compensation through affiliate links, but this never influences our recommendations.

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