Gifts. Gifts to clients are deductible, but only up to $25 per recipient annually.

Home office. If you work from home some or all of the time, you may be able to claim a tax deduction for a pro-rata percentage of home-related business expenses such as rent or mortgage, insurance and utilities. But the rules for claiming this deduction are strict.

First, your home office must be your principal place of business. If you run a machine shop several miles from your home and conduct a substantial portion of your duties from that shop, you probably can't claim your home office. By contrast, if you spend most of your time on the road but do the bulk of your administrative work in the room over your garage, you probably can. Just make sure you don't have the kids playing video games in there; your home office must be used regularly and exclusively for your trade or business, notes Dave Du Val, vice president of tax services for TaxAudit.com.

Internet, phone and cable services. Generally, these are all tax-deductible expenses when incurred at your place of business. If you want to claim them for a home office, you'll need to pro-rate them, claiming only the percentage related to business use, says CPA Scott Berger, a principal with Kaufman, Rossin & Co. in Boca Raton, Florida.

Deductions and credits you shouldn't overlook:
Among the tax benefits most often overlooked by small businesses are tax credits and deductions the government offers for what it considers beneficial behaviors -- providing certain employee benefits, for example, or hiring certain types of people. Here are some you might be able to take advantage of:

The health care tax credit. Created by the Patient Protection and Affordable Care Act of 2010 -- Obamacare -- this tax credit is generally available to your small business if you have fewer than 25 full-time equivalent employees who earn an average of less than $50,000 per year, excluding salaries paid to you or your family. You also must pay at least half of their health insurance premiums through a qualified plan or "arrangement."

 Your ordinary tax deduction for health insurance premiums will be reduced by the amount of the credit, notes Steve Warren, a CPA with Lehrman, Flom & Co. in Minneapolis, but a credit is worth more than a deduction, so it still can be a good deal. For example, if you pay $40,000 a year toward 10 workers' health care premiums and qualify for a 35 percent credit, you would save $14,000 on your tax bill before considering the reduction to your health insurance deduction.

Work Opportunity Credit. This tax credit, which can range from $2,400 to $9,600, is available for each person hired from certain target groups that historically have faced barriers to employment. They include military veterans who meet certain unemployment, disability or financial-aid criteria, ex-felons, certain people living in federally designated Rural Renewal Counties or Empowerment Zones, and people who have been receiving various forms of federal financial assistance.

Fringe benefits. You can generally claim a tax deduction for fringe benefits provided to your employees, such as group term life insurance, parking and mass transit or van-pooling services, notes Mike Scholz, a partner in the Tax and Business Services group at Wegner CPAs in Madison, Wisconsin.

Retirement plans. Too many entrepreneurs don't bother to establish retirement plans, forgoing not only valuable tax breaks but also important retirement benefits down the road, says attorney Bruce Givner of Givner & Kaye in Los Angeles. He encourages older business owners in particular to consider starting a defined benefit pension plan, which can allow much bigger annual contributions -- up to $250,000 -- than other types of plans. That can be attractive for owners who postponed retirement saving and need to sock away as much as possible in their remaining work years.