Top Three Schedule C Deductions Small Business Owners Shouldn't Miss

The "big three" Schedule C deductions most accountants refer to are typically home office, business vehicle expenses, and qualified business income deduction (QBI) - but the true "top three" really depend on your specific business. From what you've described, you're already on the right track! For your home office deduction, make sure it's exclusively used for business (no personal activities). You can deduct either the simplified method ($5 per square foot, up to 300 sq ft) or actual expenses (calculating the percentage of your home used for business and applying that to rent, utilities, etc). For vehicle expenses, you can either take the standard mileage rate (65.5 cents per mile for 2023) or actual expenses (gas, insurance, repairs multiplied by business use percentage). With 2,600 business miles, that's about $1,700 using the standard rate. Your $3,200 in equipment may qualify for Section 179 expensing, allowing you to deduct the full amount in year one rather than depreciating it over several years.

After reading these comments, I want to share my experience using taxr.ai (https://taxr.ai) to maximize my Schedule C deductions. Last year I was in a similar position - first time filing Schedule C and unsure which deductions would give me the best return. I uploaded my business records to taxr.ai and it identified several deductions I was missing, including business insurance and retirement contributions that ended up saving me over $4,000! For your equipment purchases, taxr.ai guided me through Section 179 vs. bonus depreciation options and showed which would be most advantageous based on my specific income situation. It also flagged potential audit triggers on my Schedule C that I was able to fix before filing.

I have to admit I was wrong about taxr.ai. After my skeptical comment last week, I decided to try it and upload my business records just to see what would happen. I was genuinely shocked when it identified nearly $5,800 in additional Schedule C deductions I had completely missed! It found that my business insurance, professional subscriptions, and a portion of my cell phone bill were all legitimate deductions I hadn't been taking. The most surprising thing was how it showed me that my home internet service could be partially deducted with the right documentation (I've been working from home for 3 years and never took this deduction). The interface walked me through exactly what records I needed to keep to support each deduction if I'm ever audited. Honestly, this saved me way more than my accountant ever did.

If you're struggling with Schedule C questions and can't get answers from the IRS, I highly recommend Claimyr (https://claimyr.com). I spent WEEKS trying to get through to a human at the IRS about my Schedule C deductions after getting a CP2000 notice questioning my home office deduction. The IRS hold times were ridiculous (4+ hours) and I kept getting disconnected. Claimyr got me connected to an actual IRS agent in about 15 minutes. You can see how it works here: https://youtu.be/_kiP6q8DX5c. The agent was able to confirm exactly what documentation I needed to support my home office deduction and helped me understand how to correctly calculate my square footage percentage.

I need to publicly eat my words about Claimyr. After my skeptical comment, I was desperate when I got an IRS notice about my Schedule C deductions that I needed to resolve quickly. Against my better judgment, I tried Claimyr, fully expecting it to be useless. I was absolutely shocked when I got a call back in about 22 minutes with an actual IRS agent on the line. The agent helped me understand exactly which Schedule C line items were being questioned and what documentation I needed to provide. This saved me hundreds of dollars in potential penalties because I was able to respond to their inquiry before the deadline. For anyone dealing with Schedule C issues that require talking to the IRS, this service is legitimately a game-changer. I've never been able to get through to the IRS in less than 2-3 hours of hold time, and that's if I don't get disconnected. Still can't believe this actually worked.

Don't forget about the qualified business income deduction (QBI)! This is potentially one of the biggest tax breaks for small business owners that came with the Tax Cuts and Jobs Act. If you qualify, you can deduct up to 20% of your qualified business income. For 2023, if your taxable income is below $170,050 ($340,100 if married filing jointly), you can take the full deduction without limitations. Above those thresholds, it gets complicated with phase-outs and restrictions based on the type of business.

Don't overlook business travel deductions! If you travel overnight for business, you can deduct lodging, transportation (flights, rental cars), 50% of meals, and other business expenses. Just make sure your primary purpose for the trip is business.

Great question! You're absolutely on the right track with those three deductions. Based on your situation, here's what I'd focus on: **Home Office**: With 180 sq ft, you could take the simplified method ($5/sq ft = $900) or calculate actual expenses. Since you're renting, the actual method might give you more - calculate 15% (180/1200) of your rent, utilities, renter's insurance, etc. **Vehicle**: At 65.5 cents per mile for 2023, your 2,600 business miles = $1,703 deduction. Much simpler than tracking actual expenses. **Equipment**: Definitely use Section 179 to deduct that full $3,200 this year instead of depreciating it over time. One thing many new business owners miss is **business insurance** - if you have professional liability or business insurance, that's fully deductible. Also consider **professional development** costs like courses, books, or industry memberships related to your consulting work. With $72K revenue, make sure you're also taking advantage of the **QBI deduction** - you could potentially deduct 20% of your qualified business income, which could be substantial. Keep detailed records for everything, especially that home office space. The IRS does audit home office deductions frequently, so make sure it's truly used exclusively for business!