7 Frequently Asked Tax Questions for Small Business Owners

7 Frequently Asked Tax Questions for Small Business Owners

Taxes| Payroll
October 06, 2025•3 min read

Published Date: October 06, 2025

Published By: Jac Cantos, Upcloud Accounting

New to small business taxes? It can be overwhelming! Upcloud Accounting answers seven common tax questions from small business owners, covering deductions, retirement savings, and more.

Small Business Tax FAQs: Your Questions Answered

Let's dive into these common questions to help you prepare for tax season:

  1. What Small Business Expenses Can I Deduct?

    • Check out Upcloud Accounting's comprehensive list of small business tax credits and deductions!

    • Deductible expenses range from startup costs to vehicle expenses.

  2. How Do I Calculate Travel Expenses When Using My Personal Car?

    • Deduct vehicle expenses only for business use!

    • Keep detailed records of business-related miles.

    • Two Methods:

      • Actual Expense Method: Track all vehicle costs (gas, repairs, tolls).

      • Standard Mileage Method: Deduct a set amount per business mile. The 2025 rate is 70 cents per mile.

  3. How Do I Know If I Qualify for the Home Office Deduction?

    • The home office must be usedexclusivelyfor business.

    • Exceptions: Home daycare facilities, inventory storage.

  4. What's the Best Way to Deduct My Business Assets?

    • Bonus Depreciation: Fully expense the asset's purchase price in the year it's placed in service.

      • The One Big Beautiful Bill (OBBB) sets bonus depreciation at 100% for property placed in service after Jan. 19, 2025, and before Jan. 1, 2030.

    • Section 179 Deduction: Expense a portion of the asset's cost upfront.

      • Unlike bonus depreciation, Section 179 can't create a tax loss.

  5. How Will Having a Side Gig Affect My Taxes?

    • You may need to file Schedule C to report business income and expenses.

  6. What's the Best Way to Save for Retirement as a Small Business Owner?

    • Traditional or Roth IRA: Easy to set up, even for sole proprietors. The 2025 contribution limit is $7,000 (or $8,000 if age 50+).

    • SEP IRA: Good for self-employed individuals or those with few employees. The contribution limit is up to 25% of net self-employment income (or $70,000 in 2025, whichever is lower).

    • SIMPLE IRA: Suitable for businesses with under 100 employees.

    • Solo 401(k) Plan: Ideal for those with no employees (other than a spouse).

  7. How Should I Classify My Employees?

    • Employees: You control what they do and how they do it.

    • Independent Contractors: They run their own business and service other clients.

    • Misclassifying workers can lead to penalties!

Upcloud Accounting: Virtual Outsourced Accounting and Bookkeeping Services in the Philippines

Upcloud Accounting offers accounting, bookkeeping, tax compliance, and business licensing services specializing with startups and SMEs in the Philippines.

Our goal is to increase efficiency, automation, and transparency across the accounting and finance functions of our clients with our cutting-edge technology. If you want to move your company’s finance function online, contact our Team of Expert Accountants and Bookkeepers directly via [email protected] or visit www.upcloudaccounting.com to learn more about how Upcloud Accounting accounting services can support your PH business!

Disclaimer: This article or blog is only for general knowledge and guidance and is not a substitute for an expert opinion. For technical advice, please consult your tax / legal advisor for your specific business concerns. For comments, suggestions, and feedback, feel free to email us at [email protected].

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