Introduction
The goal of every LLC owner is simple: Make money, pay less taxes.
But the IRS doesn’t make it easy. Thousands of startups overpay their taxes every year simply because they don’t know what to write off.
Did you know that you can deduct your home internet? Or that the “Bonus Depreciation” rule just got a massive upgrade for 2025?
We created this Ultimate 2026 LLC Tax Deduction Checklist to help you lower your taxable income. Every dollar you find on this list is a dollar you keep in your pocket.
1. Startup Costs (The First $5,000)
Did you spend money before you officially launched? The IRS allows you to deduct up to $5,000 in “Startup Costs” and another $5,000 in “Organizational Costs” in your first year.
What counts:
- Market research (surveys, competitor analysis).
- LLC formation fees (paid to Bizee or state/legal fees).
- Website design and hosting.
- Advertisements to announce your opening.
⚠️ The Catch: This deduction begins to phase out if you spent more than $50,000 to start your business.
2. The Home Office Deduction
If you run your LLC from a spare bedroom or a dedicated corner of your living room, you can write off a portion of your rent/mortgage.
Two ways to calculate it:
- Simplified Method: Deduct $5 per square foot of your office (up to 300 sq ft). Max deduction: $1,500.
- Actual Expenses Method: Calculate the percentage of your home used for business (e.g., 10%). Then deduct 10% of your rent, utilities, and insurance.
3. Vehicle Mileage (Rate Increase for 2025)
Do you drive your personal car to meet clients or pick up supplies? For the 2025 tax year (filed in 2026), the Standard Mileage Rate has increased to 70 cents per mile.
Example: If you drove 1,000 miles for business this year, that is a $700 deduction—just for driving your own car.
Pro Tip: You must keep a mileage log. The IRS will deny this deduction without proof.
4. Equipment & Furniture (100% Bonus Depreciation)
This is the biggest tax change for 2026. The 100% Bonus Depreciation rule has been restored.
What this means: In previous years, if you bought a $2,000 laptop, you might have to spread the deduction over 5 years. Now, you can deduct the entire $2,000 in the year you bought it.
- Eligible Items: Computers, desks, office chairs, machinery, and software.
5. Professional Services
You can deduct 100% of the fees you pay to experts who help your business run.
- Legal Fees: Money paid to LegalZoom or attorneys.
- Accounting: Monthly fees for QuickBooks Online or Xero.
- Tax Prep: The cost of buying TurboTax or hiring a CPA.
👉 Need software? Compare the Best Bookkeeping Tools Here
6. Qualified Business Income (QBI) Deduction
This is the “hidden gem” of the Tax Cuts and Jobs Act, and it has been made permanent. Most LLC owners, Sole Proprietors, and S-Corps can deduct 20% of their qualified business income from their taxes.
Example: If your LLC made $100,000 in profit, you might only be taxed on $80,000. This is a massive savings that requires no spending—just proper filing.
7. Meals (The 50% Rule)
Taking a client out to lunch? You can generally deduct 50% of the cost of business meals.
- Must be: Not lavish or extravagant.
- Must include: You (the owner) and a business associate (client, partner).
Conclusion: Don’t Miss a Single Dollar
The difference between a huge tax bill and a refund is often just record keeping.
You can’t claim these deductions if you lost the receipts. That is why we recommend using cloud bookkeeping software to track expenses automatically.
- Step 1: Form your LLC correctly. 👉 ZenBusiness vs. Bizee Guide
- Step 2: Track your expenses. 👉 QuickBooks vs. Xero Guide
- Step 3: File on time. 👉 Best Tax Software Review
