Business Tax Deductions: A Guide for Michigan Small Business Owners January 24, 2026
Running a small business in Michigan comes with plenty of expenses—but many business owners don’t realize how many of those costs may be tax deductible. Understanding common business tax deductions can significantly reduce your taxable income and help your business keep more of what it earns.
At CB Accounting, we work with small and mid-sized businesses throughout Ada and West Michigan, and we often see clients surprised by deductions they didn’t know they could take. Below is a practical common business tax deductions list every business owner should review.
Common Business Tax Deductions You Shouldn’t Miss
Office Expenses
Everyday office supplies such as paper, ink, postage, printers, and computers are deductible when used for business. This also includes software subscriptions like bookkeeping, payroll, CRM systems, and cloud storage.
Home Office Deduction
If you operate your business from home, you may qualify for the home office deduction. The space must be used regularly and exclusively for business. Eligible expenses may include a portion of:
This is one of the most commonly misunderstood deductions, so proper documentation is key.
Vehicle and Mileage Expenses
Using your vehicle for business purposes can result in valuable deductions. You may deduct:
The standard IRS mileage rate, or
Actual vehicle expenses such as gas, repairs, insurance, and depreciation
Maintaining accurate mileage logs is essential to support this deduction in case of an audit.
Travel Expenses
Business travel costs are generally deductible when the trip is primarily for business. This can include:
Airfare
Hotels
Rental cars
Transportation
Personal expenses during business travel are not deductible, so clear records are important.
Meals
Business meals may be partially deductible when they involve a client, prospect, or business discussion. Be sure to keep receipts and document the business purpose of each meal.
Marketing and Advvertising
Marketing costs are fully deductible and include:
Professional Services
Fees paid to accountants, attorneys, payroll providers, and consultants are deductible business expenses. These services often help businesses remain compliant while improving profitability.
Insurance Premiums
Business insurance premiums—including liability, property, and professional coverage—are deductible. Many self-employed business owners may also qualify to deduct health insurance premiums.
Rent and Utilities
If your business rents office, retail, or warehouse space, rent payments are fully deductible. Utilities such as electricity, water, trash, phone, and internet for your business location are also deductible.
Employee Wages and Benefits
Wages, bonuses, payroll taxes, and certain benefits paid to employees are deductible. This includes employer contributions to retirement plans and health insurance.
Depreciation and Equipment
Large purchases such as machinery, computers, office furniture, and vehicles may be deducted through depreciation. In some cases, businesses can expense equipment immediately using Section 179 or bonus depreciation, depending on eligibility.
Why Accurate Recordkeeping Matters
Many small business owners miss deductions simply because expenses aren’t tracked properly. Clean bookkeeping throughout the year:
Work With a Michigan Accountant Who Knows Small Businesses
Every business is different, and tax deductions depend on your industry, structure, and goals. Working with an experienced local accountant ensures you’re taking advantage of every deduction you qualify for—while staying compliant with IRS rules.
At CB Accounting, we specialize in helping small businesses in Ada and throughout West Michigan with:
Bookkeeping
Business tax preparation
Catch-up services
Ongoing advisory support
Ready to Make Sure You’re Not Leaving Money on the Table?
📞 Call CB Accounting today or schedule an appointment online to review your deductions and prepare with confidence this tax season.
