The Deductions Sole Proprietors Miss (and Why It Happens)
You're not missing deductions because you're careless. You're missing them because the system was never designed to help you find them.
Sole proprietors file Schedule C — and it's one of the most overlooked returns in the tax code. Unlike W-2 employees who have limited deduction options, sole props can deduct a wide range of business expenses. The problem is that most don't know what qualifies, and their CPA rarely proactively tells them.
The Home Office Deduction
If you use a dedicated space in your home regularly and exclusively for business, you qualify for the home office deduction. You can use the simplified method ($5/sq ft, up to 300 sq ft = $1,500) or the actual expense method (proportional share of rent, utilities, insurance, maintenance). Most sole props either don't know they qualify or avoid the deduction because they've heard it “triggers audits.” That's a myth — if you qualify, take it.
Vehicle & Mileage
If you drive for business — client meetings, supply runs, job sites — you can deduct mileage at the IRS standard rate (67 cents/mile in 2024) or actual vehicle expenses. The catch: you need a log. Most sole props drive thousands of deductible miles but never track them because they didn't start tracking on January 1. Start now. Even a partial-year log is better than nothing.
Self-Employed Health Insurance
If you pay for your own health insurance and aren't eligible for an employer-subsidized plan through a spouse, you can deduct 100% of your premiums — including dental and long-term care — as an adjustment to income. This isn't an itemized deduction; it reduces your AGI directly. Many sole props miss this entirely.
Retirement Contributions
Sole props can open a SEP-IRA and contribute up to 25% of net self-employment income (up to $69,000 in 2024). That contribution is fully deductible. If you're earning $100K+ and not contributing to a retirement plan, you're paying taxes on income you could be sheltering — and building wealth at the same time.
Equipment & Software (Section 179)
Laptops, cameras, tools, software subscriptions, office furniture — if you use them for business, they're deductible. Under Section 179, you can deduct the full cost in the year of purchase instead of depreciating over time. Many sole props treat these as personal expenses and never claim them.
Why This Keeps Happening
The tax system doesn't reward you for finding deductions — it expects you to already know. CPAs are reactive: they work with the data you give them. If you don't categorize an expense as business-related, it doesn't show up. If you don't ask about home office, it doesn't get calculated. The burden of knowledge falls entirely on you — and nobody trains sole props on what to look for.
How Logos Helps
Logos connects to your bank account and scans your transactions for tax-relevant expenses you might be missing. Upload your Schedule C and Logos flags the gaps — deductions you didn't claim, categories you underreported, strategies you've never considered. The Enchiridion playbook calculates the dollar impact so you can see exactly what you're leaving on the table.
Ask Logos about your Schedule C →