Every year, I find missed deductions when reviewing returns from new clients. Here are the five most common.
1. NJ BAIT Election
The single most frequently missed opportunity. Pass-through owners who itemize and are over the SALT cap can generate thousands in federal savings.
2. Retirement Plan Contributions
Many self-employed owners don’t maximize or even establish a retirement plan. A SEP-IRA allows up to 25% of net income.
3. Home Office Deduction
The simplified method gives $1,500 with minimal recordkeeping. The regular method can yield more.
4. Vehicle Expenses
70 cents per mile for 2025. A simple mileage tracking app running in the background solves the documentation problem.
5. Health Insurance Premiums
Self-employed individuals can deduct premiums for themselves and families as an above-the-line deduction.
The Lesson
Tax preparation isn’t just data entry — it’s an analysis of your situation to identify every legitimate deduction.
Disclaimer: The information provided is for general educational purposes only and does not constitute tax, legal, or investment advice. This content is not intended or written to be used, and cannot be used, for the purpose of avoiding penalties under the Internal Revenue Code. Tax outcomes depend on your specific facts and circumstances. Viewing this material does not create a CPA-client relationship. Personalized advice is provided only through a signed engagement letter.
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