Home Business Tax Write-Offs List: 12 Smart Ways to Cut Your Tax Bill This Year

Proactive Tax Strategies to Save Thousands by Maximizing Your Home Business Deductions

If you're running a home-based business, understanding what qualifies as a tax write-off can make a massive difference. From home office expenses to hiring your kids, this guide walks you through 12 of the best business tax write-offs most entrepreneurs miss—until it’s too late. Use this list to stay proactive, compliant, and confident all year long—not just at tax time.

Why Year-End Tax Tips Matter (Even If You Think You're "Too Small")

Whether you're earning $5,000 or $500,000 from your home business, you're entitled to write-offs that reflect the reality of running a business. But you only benefit if:

• You track them accurately
• You document them properly
• And you know they exist

The tax code—both in the U.S. and Canada—is filled with incentives that favor entrepreneurs, but few home-based business owners are ever taught how to use them. Especially not by their accountant.

That’s why I wrote The Home-Based Business Guide to Write Off Almost Anything. And that’s why I’m writing this article—to help you shift from tax season stress and stop overpaying the government, one receipt at a time. Let’s get into it.

The Mindset Shift: You’re Responsible for Your Tax Strategy

Most business owners assume their tax preparer will "take care of it." But here’s the hard truth: Your tax preparer is not responsible for finding your write-offs. You are!

Even the most qualified CPA won’t know what expenses you forgot to claim, what meetings you didn’t document, or what software you prepaid without noting it in your books.

Proactive business owners know that:

• You can’t write off what you don’t track
• Your CPA can’t help you if you don’t give them context
• Strategy beats scrambling—every time

This blog is your invitation to get ahead—starting now.

The 12 Best Business Tax Write-Offs to Tackle Before Year-End

This list isn’t just about “year-end tax tips.” It’s about shifting into year-round tax strategy thinking. But the end of the calendar year is your last chance to time your deductions for maximum impact.

Here’s where to start:

1. Business Use of Home Expenses
2. Office Supplies & Year-End Stock-Up
3. Prepaid Software, Subscriptions, and Tools
4. Business Travel (Planned Now, Claimed This Year)
5. Meals and Entertainment (With Proper Documentation)
6. Business Gifts for Clients and Contractors
7. Hiring Your Kids
8. Landscaping and Home Improvements
9. Year-End Inventory Adjustments
10. Branded Clothing 
11. Charitable and Political Contributions
12. Strategic Income Timing

1. Business Use of Home Expenses

If you run your business from a dedicated area in your home—even a converted basement corner, spare bedroom, or enclosed sunroom—you may be able to claim a percentage of your household expenses as a business-use-of-home deduction.

Eligible expenses often include:

• Rent or mortgage interest (not principal)
• Utilities like heat, electricity, and water
• Property taxes and home insurance
• Maintenance, repairs, and cleaning costs related to the workspace

The key is to calculate the business-use percentage of your home based on square footage or time of use—and to ensure the space is used exclusively for business purposes, as required by both the CRA and IRS. Want a clear, audit-ready way to calculate this? Read my full guide: How to Calculate Business Use of Home Space for Home-Based Business.

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2. Office Supplies & Year-End Stock-Up 

Before year-end, take a quick inventory of your office supplies—printer toner, paper, pens, sticky notes, envelopes, and anything else you’ll need in the months ahead. Then stock up before December 31st.

Anything you purchase before the end of the year qualifies as a 100% tax write-off for this tax year.

Not only does this reduce your taxable income, but it also sets you up for a more productive start to the new year. This is a tax strategy I use every year: I stock up on essentials, prep my workspace, and lock in the savings.

Want a full list of what qualifies? See Chapter 20 in my book, The Home-Based Business Guide to Write Off Almost Anything. You’ll find a detailed list of claimable office supply expenses to help ensure nothing slips through the cracks.

What About Office Furniture?

Here’s a tax strategy I’ve personally used—and it’s saved me a lot of money over the years.

When we moved into a new space several years ago, I sold my old office furniture and bought a new desk and filing cabinet for my updated home office. That purchase was claimed as a 100% tax write-off on my return for that year. A few years later, when we moved again, I did the same thing—sold the old setup and invested in new ergonomic furniture.

Today, I use a stand-up desk, a high-quality ergonomic chair, and yes—even an under-desk walking treadmill. I first heard about it while walking my dog, Kodi, and listening to a podcast called Home Entrepreneur Productivity Hacks. One of the guests shared how walking while working had transformed their energy and focus.

I gave it a try, and now I often walk for 60 minutes while outlining blog posts just like this one. It's been a game-changer for both my productivity and well-being—and best of all, every part of that setup was a legitimate business expense.

IRS vs. CRA Rules for Office Furniture

U.S. (IRS): Under Section 179, you can deduct the full purchase price of office furniture and equipment—up to $1 million per year. This allows for more flexibility when upgrading your workspace. Canada (CRA): The CRA considers purchases over $500 per item to be capital assets, meaning you must depreciate the cost over time using Capital Cost Allowance (CCA). To maximize your deduction in the same year, keep individual items under $500 when possible.

Bottom line: Supplies are simple. Furniture needs strategy. But either way, these investments can improve your workflow—and reduce your tax bill—if you plan wisely and document everything.

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3. Prepaid Software, Subscriptions, and Tools

As the calendar year wraps up, it’s the perfect time to assess your business software needs and make strategic purchases. Why? Because many software tools and subscriptions are 100% tax-deductible in the year you pay for them—even if you won’t use the service until next year.

Here’s how software investments can benefit your home-based business:

• Boost Efficiency: Project management platforms and productivity apps help streamline daily operations and reduce mental clutter.
• Enhance Marketing: Social media schedulers, SEO tools, and email automation platforms can elevate your visibility and impact.
• Improve Client Relationships: CRM systems help you stay organized, track client needs, and follow up like a pro.
• Scale Operations: Graphic design tools, inventory tracking systems, and e-commerce software make it easier to grow with confidence.

Why it matters: Under both CRA and IRS guidelines, software expenses—whether billed monthly or paid upfront—are considered legitimate business tax write-offs. If you prepay for a subscription before December 31st, you can still claim the full amount as a deduction in this tax year, even if the service is used in the following year.

Always save your receipts, email confirmations, and a short note on how the tool supports your business income. This is key for audit-proofing your return.

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4. Business Travel (Planned Now, Claimed This Year)

Business travel isn’t just a necessary expense—it can be a strategic tax write-off when planned correctly. Booking and paying for eligible travel before December 31st ensures you can deduct those expenses on this year’s tax return, even if the trip takes place in the new year.

Here’s what qualifies:

• U.S. (IRS Guidelines): Travel expenses are deductible if they are ordinary, necessary, and directly related to your business. This includes airfare, hotels, rental cars, and 50% of business meal costs. Conferences and conventions within North America generally qualify; international travel must serve a clearly defined business purpose to be deductible.
• Canada (CRA Guidelines): You can deduct reasonable travel expenses such as transportation, lodging, and meals for up to two business conventions per year, provided they directly support your business activities.

Combining Business and Personal Travel:

If more than 50% of your trip is business-related, the entire round-trip transportation cost may be deductible. However, personal expenses—like a family member’s airfare—are not deductible unless that person is actively contributing to the business purpose of the trip.

Audit-Proofing Tip: Keep detailed records: save your receipts, note the dates and purpose of each business activity, and maintain a copy of your itinerary. A paper trail strengthens your case in the event of a CRA or IRS review.

Consider booking business travel before year-end—even for trips happening next year. As long as the payment is made by December 31st and the intent is clearly business-related, you can deduct it on this year’s return.

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5. Meals and Entertainment (With Proper Documentation)

A few years ago, I had an interesting conversation with a CRA auditor and small business GST liaison officer. I asked her what areas she scrutinizes most when auditing home-based businesses. Her answer didn’t surprise me—but it confirmed something I’ve seen for years.

She said that meals and entertainment expenses are one of the most common problem areas. Not because people are trying to cheat the system—but because they either:

• Don’t record the expenses properly
• Claim personal meals that don’t qualify
• Or don’t realize what’s actually deductible

She told me that many home-based business owners think they’re claiming what they’re entitled to—but often miss legitimate write-offs because they lack the records to back it up.

It’s not just about saving receipts. It’s about knowing what qualifies—and documenting it clearly.

What You Can Claim: Both the CRA and IRS allow a 50% deduction for meals, as long as the expense is ordinary, reasonable, and related to business.

• The IRS is stricter on entertainment—most entertainment costs (like sporting events or golf outings) are not deductible unless meals are separately itemized.
• The CRA is more flexible on business-related events, including certain holiday meals or team gatherings, as long as the business purpose is clear.

The 5 Things You Must Record for Every Meal Expense:

Three of these are usually printed on your receipt. The other two are up to you.

• Name of the place (restaurant, café, etc.)
• Date of the meal or event
• Total amount spent
• Name of the person you met with
• Business purpose or topic discussed

Missing just one of these details could mean the expense is denied in an audit—even if it was 100% legitimate.

The auditor emphasized that many small business owners are unaware of what they can and can’t claim. Some try to navigate it alone. Others rely on tax preparers who never ask the right questions.

Don’t let that be you. Keep clear records. Claim with confidence. 

And if you need a deeper dive, revisit Chapter 27 in my book, The Home-Based Business Guide to Write Off Almost Anything—it’s dedicated to Meals & Entertainment.

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6. Gifts for Clients or Team Members

Did you know gifting can double as a tax-saving strategy? It’s true!

Whether it’s gift cards, a bottle of wine, or a box of chocolates, client gifts can often qualify as business expenses.

Here’s how to do it right:

• Stock up on gift cards or thoughtful gifts before December 31 to claim them as advertising or promotional expenses for that year.
• If the gift is meal-related (restaurant gift cards), the 50% meals and entertainment rule applies.
• Keep your receipts and records to show how the gifts relate to earning business income—include details like who the gifts were for and the business purpose.

In Canada, the CRA does not set a strict dollar limit on gifts to clients or contractors, but the expense must be reasonable in the circumstances, directly related to your business, and incurred to earn income. The CRA expects gifts to be modest and aligned with industry norms. Lavish or excessive gifts may be denied if they appear personal or unrelated to business activity.

While CRA doesn’t impose a fixed cap like the IRS does ($25 per client), they do scrutinize:

• Whether the gift is promotional or personal in nature
• If the expense has a clear business purpose (e.g., maintaining client relationships or goodwill)
• Whether it’s a cash equivalent (which may be treated differently than physical gifts)

Gift cards are often considered equivalent to cash and may be treated more cautiously than branded or tangible items.

Smart gifting with clients doesn’t just build relationships; it helps you save on taxes, too!  

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7. Hiring Your Kids

This is a family-friendly tax strategy that’s both practical and rewarding. Get your kids involved in your home business before December 31, pay them a wage and enjoy the tax benefits!

It’s a win-win—you’ll save on taxes, and they’ll gain valuable skills and income (or savings).

Here’s how it works:

• Pay them fairly: Wages paid to your minor child for business-related work are fully deductible for you and exempt from payroll taxes for both you and your child (as per IRS and CRA rules).
• Keep it reasonable: Pay them what you’d pay an outside freelancer for similar work, and ensure the tasks they perform are genuinely business-related.
• Teach valuable skills: Help them open a savings account, save for a big purchase, or even cover their own phone bill!

Recordkeeping is key:

• Keep track of tasks they complete and how much you pay them.
• Use documented payments, preferably direct deposits if they have a bank account rather than cash payments.

In the U.S., children can earn up to $14,600 (as of 2024 tax year) without owing federal income tax. In Canada, the amount is $15,705 (as of 2024 tax year), based on the Basic Personal Amount.

These wages are deductible as a 100% tax write-off in your business, provided they are reasonable, properly documented, and for legitimate work.

This can could be a way to set money aside for your kids post-secondary education, allowance, or to fund their favorite sporting activity.

When my kids were young I often had them help me in my home business to prepare mailings, sample information packets and even help me at tradeshows and vendor events. 

Getting your kids involved not only reduces your taxable income but also teaches them entrepreneurship, responsibility, and the value of earning money. 

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8. Landscaping and Home Improvements

If you're running a home-based business, certain home upgrades may qualify as tax-deductible—but only when they’re directly tied to your business activities.

For example, if you meet with clients at your home or offer a service from your property, improvements that enhance the appearance or functionality of your space may be considered legitimate business expenses. This could include:

• Landscaping to improve curb appeal
• Repairs or upgrades to entryways or waiting areas
• Tools, materials, or contractor fees related to those improvements

Important: These types of home improvements are usually claimed as business-use-of-home expenses and must be prorated based on your home office percentage. If your home office occupies 10% of your home, only 10% of the related cost is deductible.

What About Office-Specific Improvements?

Any improvements made directly to your dedicated home office space—such as installing new flooring, shelving, or built-in desks—may qualify as a 100% tax write-off, as long as the space meets CRA or IRS definitions for business-use-only.

To qualify, your home office must be used exclusively and regularly for business purposes. Mixed-use or personal-use spaces generally don’t qualify for full deductions. You can learn more about calculating this write-off in my guide: How to Calculate Business Use of Home Space for Home-Based Business.

Always keep detailed records, including receipts, floor plans, and before/after photos if needed to prove business intent. 

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9. Year-End Inventory Adjustments

As the year comes to a close, now is the time to review your inventory and make strategic decisions that can reduce your taxable income.

Unused, obsolete, or unsellable inventory doesn’t just take up space—it may also represent a tax-saving opportunity if addressed before December 31.

Here’s how inventory write-offs can work for your home-based business:

What qualifies: Inventory that is damaged, expired, no longer sellable, or discontinued may qualify for a full or partial write-off. This includes unsold promotional materials, products affected by packaging changes, or perishable goods past their shelf life.

Why it matters: Writing off unusable inventory allows you to reduce your cost of goods sold (COGS), which in turn lowers your business’s net income for the year—resulting in potential tax savings.

Recordkeeping is essential: To support this deduction, document:

• The type and quantity of inventory
• The reason for the write-off (e.g., expired, damaged, obsolete)
• The estimated value and original cost
• Any supporting records (invoices, photos, or product logs)

Write-down vs. write-off: Not all inventory qualifies for a full write-off. Items that are simply out of season or being sold at a discount may instead require a write-down of their value. In this case, you write down part of the original cost and then sell the item at a lowered adjusted price, based on that reduced inventory value. 

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10. Branded Clothing

Did you know that clothing can qualify as a business tax write-off?

While personal clothing doesn’t count, branded items featuring your logo, business name or a brand are a smart way to promote your business and to claim some clothing items as a tax write off by December 31.

Here’s how it works:

• Make it business-related: Clothing like t-shirts, hoodies, jackets, and hats with your logo or branding qualifies as a marketing expense.
• Wear it with purpose: These items must be worn to promote your business, generate conversations, or create brand awareness.
• Stay compliant: In both the U.S. and Canada, clothing must be purchased with the intent of generating business income to qualify for the write-off.

Whether it’s for you, your team, or as client gifts, branded apparel helps you stand out and market your business while saving on taxes.

Think about branded hats for summer events, jackets for winter, or t-shirts for everyday wear activities. Not only are these practical, but they also serve as walking advertisements for your business.

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11. Charitable and Political Contributions

Giving back isn’t just good for the community—it can also be a smart part of your year-end tax planning. Charitable donations made before December 31st may reduce your tax bill while supporting causes that matter to you.

Here’s what you need to know:

To qualify for a tax deduction or credit, donations must be made to registered charities (in Canada) or qualified organizations (in the U.S.).

• In the U.S., political contributions are not tax-deductible for individuals or businesses.
• In Canada, political contributions may qualify for a separate non-refundable tax credit, depending on the amount and the level of government (federal vs. provincial).

Personal vs. Business Claiming:

• In the U.S., charitable donations are typically claimed on your personal tax return if you itemize deductions.
• In Canada, donations generate a non-refundable tax credit and are also claimed personally, not through your business, even if the donation was made from business income.

Save your official donation receipt. It should include:

• The charity’s registration number (CRA or IRS-qualified)
• The date of the donation
• The exact amount donated

Donating Appreciated Assets:

If you donate appreciated securities, stocks, or mutual funds, you may avoid paying capital gains tax and still claim the full fair market value of the donation—making this a particularly tax-efficient strategy for higher-income earners.

Why this matters:

Charitable giving lets you:

• Support your community and align your business with meaningful causes
• Reduce your taxable income or generate tax credits
• Build goodwill and visibility if the organization shares your values or audience

Ask yourself: Are there local charities or community initiatives that align with your mission as a home-based business owner? A year-end gift could benefit them and optimize your own tax strategy. 

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12. Strategic Income Timing

As the year winds down, it's worth considering how the timing of your income can affect your tax position. For home-based entrepreneurs—especially those using the cash method of accounting—deferring income into the next calendar year can be a legitimate and effective way to reduce your tax bill for the current year.

Here’s how to implement this strategy:

Key Benefits of Timing Your Income:

• Stay in a lower tax bracket: Deferring income into the next year could keep your 2024 income within a lower tax bracket, reducing the total tax owed.
• Align income with deductions: If you expect larger business expenses next year, deferring income may help offset those with corresponding deductions—keeping your net income stable year over year.

How to Put It into Practice:

• Delay invoicing: If you offer services or products, consider holding off on sending invoices until January—especially for non-urgent work.
• Adjust payment terms: If you’ve already invoiced clients, you may be able to negotiate a later payment date (post-December 31).
• Postpone major sales: If possible, delay the finalization of larger deals or product shipments until the new year—particularly if those sales would push you into a higher bracket now.

Important Considerations:

• Compliance matters: This strategy is only effective when it complies with IRS or CRA regulations. Documentation is key—don’t simply avoid income; defer it properly and transparently.
• Know your forecast: If you expect significantly higher income next year, deferring income may backfire by pushing you into a higher bracket later. Always weigh current and future income expectations.

Maximizing the Strategy:

Pairing income deferral with early expense planning—such as prepaying for software, restocking supplies, or investing in equipment—can create a powerful combination for year-end tax savings. This strategy helps you lower income now while building deductions into the future.

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Ready to Maximize Your Home Business Tax Write-Offs Year-Round?

Everything in this article—and so much more—is covered in my book, The Home-Based Business Guide to Write Off Almost Anything.

This isn’t just a list of deductions. It’s a tax mindset reset designed to help you:

Think like a proactive tax strategist

Make confident, audit-ready decisions

Save thousands—legally, ethically, and proactively

Whether you’re just starting out or looking to optimize your existing business, this book gives you the strategy, clarity, and support your CPA never did.

Get your copy today at www.HomeBusinessTaxSecrets.com/book

Let this be the year you stop leaving money on the table—and start taking control of your tax strategy for good.