19 Tax Deductions Self-Employed Professionals Often Overlook
Maximize Your Self-Employment Tax Deductions:
Self-Employment Tax Credit
This is a significant tax credit that most self-employed professionals do not take advantage of.
If you were hit by COVID-related problems in 2020 or 2021, you can qualify to receive up to $32,220 in tax credits under the FFCRA program.
Our app can make this process very easy for you.
Health Insurance Premiums
Did you pay health insurance premiums for yourself or your family? That might qualify you for an above-the-line deduction.
This includes medical and dental insurance for spouses, dependents, and children under 27 years old at the end of the tax year.
Long-term care insurance premiums may also apply.
Continuing Education
Keep informed and support your skills.
You can reduce your tax bill for qualifying work-related education expenses, like tuition, books, supplies, and transportation to and from classes.
Mileage Deduction
Deduct over $1 for every two miles you travel for business.
Keep a detailed mileage log to claim this deduction.
Retirement Contributions
Contribute to a solo 401(k) and realize substantial tax deductions.
You can contribute up to $66,000 for 2023 ($69,000 in 2024), with additional catch-up contributions if you are 50 or older.
Self-Employment Tax
Deduct half of the amount of self-employment tax due on your Form 1040.
Business Insurance Premiums
Deduct premiums for business insurance, including employee health and accident insurance.
Vehicle Purchase or Lease
Whether you purchase or lease, there are multiple ways to deduct vehicle-related expenses.
Options include depreciation, Section 179 deductions, actual costs, or standard mileage rates.
Keep detailed records of business versus personal use.
Credit Card and Loan Interest
Deduct interest accrued on business-related purchases using credit cards.
Phone and Internet Costs
Deduct expenses for a cell phone or internet used for business.
Reflect the percentage used for business if you don't have a dedicated line.
Business Travel and Meals
Deduct expenses for business travel, including flights, hotels, taxis, and meals.
Startup Costs
Deduct up to $5,000 for business start-up and organizational costs, including advertising, employee training, and consulting fees incurred before your business opens.
Advertising
Deduct expenses for business-related advertising and promotion.
Memberships
Deduct memberships in professional organizations, such as business leagues, chambers of commerce, and trade boards.
Social clubs or organizations primarily for entertainment are excluded.
Qualified Business Income Deduction
Deduct up to 20% of your business income if your total taxable income is below certain thresholds.
Home Office Expenses
Deduct a portion of your mortgage or rent, utilities, and repairs if you use part of your home for business.
Calculate the percentage of your home dedicated to business use.
Rent
Deduct the cost of rent for an office, workshop, or other dedicated business space.
Office Supplies
Deduct everyday office supplies like pens, paper, and postage.
Depreciate more significant items like computers over time.
Additional Expenses
Deduct most expenses incurred as part of running your business, such as outside services, software subscriptions, postage and shipping, and charitable contributions.
Do not let these opportunities slip by. Control your taxes and keep more of what you earn. For a detailed look at each of the deductions, read our complete guide, and we will help you navigate the ins and outs of self-employment taxes.
