Self-employed expense deductions
Common Self-Employed Deductions:
Home Office Deduction: Deduct portion of rent/mortgage interest, utilities, and maintenance expenses for home office space.
Business Use of Your Car: Deduct mileage or actual expenses for business use of vehicle.
Business Expenses: Deduct expenses related to business operations, such as:
Equipment, supplies, and materials
Travel expenses (transportation, lodging, meals)
Professional fees (consultants, lawyers, accountants)
Advertising and marketing expenses
Self-Employment Tax Deduction: Deduct half of self-employment tax as a business expense.
Health Insurance Premiums: Deduct health insurance premiums as a business expense.
Retirement Plan Contributions: Deduct contributions to SEP-IRA, solo 401(k), or other retirement plans.
Forms and Filing Requirements:
Schedule C (Form 1040): Report business income and expenses.
Form 8829: Calculate home office deduction.
Form 4562: Calculate depreciation and amortization.
Self-Employment Tax (Schedule SE): Report self-employment tax.
Key Considerations:
Business Use Percentage: Calculate business use percentage for home office, car, and other expenses.
Record-Keeping: Keep accurate records of business expenses, income, and mileage logs.
Business Entity: Consider forming an LLC or S-Corp for tax benefits and liability protection.
Tax Planning Strategies:
Maximize Business Expense Deductions: Keep track of expenses throughout the year.
Consider Retirement Plan Contributions: Contribute to retirement plans for tax benefits and savings.
Consult a Tax Professional: Seek professional advice for complex tax situations.