Self-Employed Tax Deduction Checklist

Are your taxes as low as they can be? Run through this checklist to make sure you haven’t skipped over any deductions available to the self-employed.

This post is provided for general information only. Please confirm the details and circumstances of your unique situation with your tax accountant or other appropriate advisor before taking action.

Common Self-Employed Tax Deductions

  1. Self-Employment Tax: One half of your self-employment tax is deductible for income tax purposes. If you’ve already entered your business income and don’t see this deduction on line 27 of your IRS Form 1040, it’s time to change tax software or fire your tax preparer.
  2. Health Insurance: If you paid for your own health insurance, either as part of the Obamacare exchange or privately, be sure to take this deduction.
  3. Home Office: If you used an area of your home exclusively for your business, don’t skip the home office deduction. This could include a portion of your electric bill and other utilities. Remember, your bills wouldn’t be as high if you were away from home during the day.
  4. Other Business Expenses: Did you maintain a website, buy office supplies, or spend money on advertising? Include these expenses on your Schedule C. Don’t forget transportation expenses between clients or other job sites.
  5. Retirement Contributions: Did you contribute to a retirement plan during the year? See if you qualify for up to $1,000 via the Saver’s Credit. Don’t forget that you can also reduce your AGI by contributing to a traditional IRA, SEP IRA, or individual 401(k).
  6. QBI Deduction: With the qualified business income deduction, you may be eligible to deduct up to 20% of your profits just for not being a corporation.

Remember, this self-employed tax deduction checklist only includes deductions related to owning your own business. Don’t forget to look into other deductions like student loan interest, medical expenses, and charitable contributions.

You may also want to talk to a tax planning professional to see if there are any less common deductions you could be taking.

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