7 Key Tax Deductions Small Business Owners Get to Claim

Every year, whenever the month of April rolls around, we marvel at the beauty of Spring’s beginning. Followed closely behind filing our annual tax returns. It’s a stressful time for Americans as we search high and low to come up with the right paperwork and information to complete our returns. Then there are the itemized deductions we report, hoping to minimize our tax liabilities enough to get a nominal return for another year of hard work.



If you’re an employee, much of what you report for your tax preparation is somewhat predetermined. Working for others, you have a set salary rate, certain benefits, and hopefully a retirement account that can be considered good enough for now. But when you are the business owner, there are multiple benefits you can take advantage of, thanks to our tax code. In the spirit of tax season, FranNet of DFW & Oklahoma presents seven key tax deductions small business owners get to claim.


The Home Office

Of the thousands of franchise concepts on the market today, a good portion of them require no brick-and-mortar storefront on Main Street. Many franchise opportunities are either mobile-based or allow you to work from the comfort of your own home. And if you do so – you’re entitled to deduct any and all expenses paid to furnish and maintain it.


Storefront Savings

If you’re a franchise owner that’s required to establish a storefront, you’re wholly entitled to write off any costs related to the upkeep and maintenance of your establishment. So long as they’re necessary for upkeep and not refurbishing, you’re in the clear.


Employee-Based Deductions

If you’re a franchise owner who employs staff, there are additional deductions you can claim, beginning with their wages, commissions, and even bonuses. The same goes for your insurance requirements. Worker’s compensation and liability insurance costs can also be claimed.


Charitable Contributions

Most, if not all, franchisors have some form of charitable giving program. It’s one of the most meaningful aspects of franchise ownership, as monetary donations go right back into the communities they serve.


Personal Transportation

If you’re a franchise owner, you’re more than welcome to write off any and all expenses from the usage of a company vehicle – which is great news for our mobile-based franchisees. Any maintenance, fees, licenses, and even insurance are fully deductible.


Business-Related Entertainment

As a franchise owner, you can be the hero when it comes to lavishing entertainment on your employees. Tax deductions can be claimed for company-related events, meals, and outings. And there’s even better news for company-based entertainment during the 2023 fiscal year, included in the Tax Cuts and Jobs Act. Client-based meals are 50% deductible, as are snacks for employees. And office parties are 100% deductible, so no excuses for having a lame Christmas party later this year!


Advertising and Marketing

Since many franchise owners support the collective advertising and promotional costs to raise brand awareness, there’s another great deduction in store for you. Because the IRS happens to consider any costs related to these activities as tax deductible.


Startup Expenses

FranNet of DFW & Oklahoma saved the best benefit for last – startup expenses. If you’re an entrepreneurial-minded candidate considering franchise ownership, you’ll be allowed to claim up to $5,000 in tax-deductible expenses prior to the actual launch of your business. There are some caveats, but costs such as training, travel, market research, and wages paid to contractors or consultants are included.


So, as you can see, if you’re a business owner, you may not have to dread the April 15 deadline each year going forward. The U.S. tax code looks favorably upon entrepreneurship, and these tax deductions are one way of encouraging small business growth. As with any tax-related advice, it’s always advisable to check with your CPA or personal accountant to make sure your expenses – as well as deductions – are in compliance with all state and federal laws.


Let’s Chat!

If you’d like to know more about franchise opportunities and ownership, please get in touch. FranNet of DFW & Oklahoma is uniquely qualified to match your potential with the possibilities that come from small business ownership through franchising. All you have to do is allow us to be your guide. Our no-cost, no-obligation consultations have helped hundreds of entrepreneurs in North Texas and Oklahoma secure a future that belongs to them and them alone. If you’d like to get started on your own entrepreneurial journey, we’d love to introduce you to a whole new world of possibilities through franchise ownership.

Apr 11, 2023