Small Business Tax Deductions Update 2024

February 12th, 2024

Which small business tax deductions have changed for 2023? To start, business meals and bonus depreciation. With the new tax season upon us, you must be up to date with Small Business Deduction changes for the 2023 tax year.

Small Business Tax Deductions Update 2024

Which expenses does the IRS permit you to deduct as a small business? Well, there is no official list of business deductions for any industry. In short, you can deduct any expense that is “ordinary and necessary” for your business activity. It is up to you to determine and justify what is ordinary and necessary and to keep receipts and document the business purpose of the expense.

Some of the most missed business write-offs include auto expenses, home office deductions, and depreciation of assets.  Some of the expenses most likely to raise the attention of the IRS are the “pleasure expenses” such as meals and travel.

Tax year 2023 has reset the meals deduction back to 50%, instead of the full 100% deduction allowed as a concession to the struggling restaurant industry for both 2021 and 2022.

Another major change for 2023 is a reduction in the bonus depreciation deduction allowed on the purchase of heavy vehicles with gross vehicle weight ratings above 6000 lbs. For 2023 the maximum deduction drops to 80% of the vehicle cost, down from a 100% deduction in 2022.  This deduction will continue to decrease by 20% each year until it is completely phased out by 2027.

Contact us to help you identify all your qualified tax deductions

To apply OR renew your City of San Diego Business Tax Certificate, please click on the following link:

For a comprehensive Self-Employment, Income, and Expense Organizer please visit under Resources, Tax Organizers or click on the link below:

The city tax application must be submitted within 15 days of the business start date. Businesses that fail to pay within this time frame are subject to a late fee of $25.00 or 10% of the amount owed, whichever is greater. Some surcharges apply for businesses that are found operating in the City of San Diego but have not paid the Business Tax.

If you have any questions: please refer to the FAQ’s on the city website: