A Deep Dive into Deductions: Did You Miss Any?

From the Desk of an Accountant Helping Businesses Maximize Legal Deductions and Keep More of What They Earn

Every tax season, I sit down with business owners across industries—retailers, freelancers, consultants, and SMEs—and one pattern keeps showing up:

📌 They miss deductions.
Not because they’re non-compliant.
Not because they don’t want to save.
But because they didn’t know what could be deducted—or didn’t document things properly.

As an accountant, I don’t just file tax returns. I help clients design systems that capture every legal deduction, so they don’t leave money on the table. And believe me, those missed deductions could have meant an extra ₱10,000, ₱50,000, or even ₱200,000 in savings.

💸 Why Deductions Matter So Much

Let’s say your business earned ₱2,000,000 last year.
If your valid deductions only totaled ₱800,000, your taxable income is ₱1,200,000.
But what if you had missed ₱200,000 worth of allowable expenses?

That’s an unnecessary tax on ₱200,000.
At a 20% corporate income tax rate, that’s ₱40,000 in tax paid—for no reason.

📋 Common Deductions Business Owners Miss

Here are the top categories I often uncover when reviewing a client’s records:

✅ 1. Home Office Expenses

If you're running part of your business from home, you may deduct a portion of:

• Rent

• Utilities (electricity, internet)

• Repairs and maintenance for the home office space
  
  

Just make sure it’s properly documented and used solely for business.

✅ 2. Representation & Marketing Expenses

Taking clients to coffee shops or restaurants for meetings? Buying promotional giveaways? Running Facebook Ads?

These are valid deductions when they’re related to business development—if you have receipts and proof of intent.

✅ 3. Professional Fees

Payments to freelancers, consultants, or subcontractors are deductible if:

• You issued a BIR Form 2307 (for withholding tax), and

• They gave you an OR or invoice.
  
  

✅ 4. Training and Seminars

Did you or your staff attend business-related webinars or trainings? These costs—fees, transportation, even accommodations—can be deductible.

✅ 5. Bad Debts (Properly Written Off)

Clients who never paid you? If you have proof of collection efforts and you’ve written it off, you may be allowed to deduct those unpaid amounts.

🧾 Documenting is Everything

I always remind my clients: If you can’t prove it, you can’t deduct it.

That’s why internal control systems are critical. Here’s what we set up for clients:

• A clear Chart of Accounts that categorizes deductible items correctly

• A habit of scanning and organizing receipts monthly

• Training for staff to always collect valid ORs or invoices

• A digital trail (emails, chats, contracts) to back up expense purposes
  
  

This is why accountants are not just compliance officers—we’re system builders. We help you build a machine that protects your income legally and consistently.

⚠️ What to Do if You Missed Deductions Last Year

It’s not too late to learn from what you missed:

1. List major expenses you paid out of pocket or through personal accounts.

2. Check if receipts were lost or not requested.

3. Review your BIR-allowed deduction categories.

4. Talk to your accountant about how to impove your recording process this year.
   
   

Better systems = Better deductions = Better peace of mind.

💬 Final Thoughts: Don’t Let Laziness Cost You

In business, every peso counts.

Missing even small deductions repeatedly can mean tens of thousands of pesos lost every year. I've had clients who were shocked when we revised their system and discovered ₱120,000 in missed deductions—for just one year.

So, take this post as a sign to pause and ask yourself:
Did I miss anything?

And if you’re unsure, don’t just guess—ask your accountant.
We’re not just here to file your taxes.
We’re here to help you build a smarter, more profitable system.