Self-employed people are the most over-taxed group in America because most do not claim everything they are entitled to. Here is the complete list.
$5/sq ft simplified or actual home expenses x business %. Dedicated space used exclusively for business qualifies.
67 cents/mile (2024). Client meetings, site visits, supply runs, post office. Keep a log — this is often the second biggest deduction.
100% deductible above the line for you, spouse, and dependents. Reduces both income tax and self-employment tax.
SEP-IRA: up to $66,000 (2024). Solo 401(k): up to $69,000. Every dollar contributed is fully deductible.
Up to 20% of qualified business income. Complex rules — most software calculates this incorrectly.
Section 179 lets you deduct the full cost in year of purchase. Computers, cameras, tools, machinery.
Business-use percentage of phone and internet bills. 70% business use = 70% deductible.
Courses, books, certifications, coaching, conferences related to your business — fully deductible.
Payments to subcontractors are deductible. Issue 1099-NEC to anyone paid $600+ during the year.
Website, ads, business cards, photography, social media tools, and any promotion expense.
Legal fees, accounting fees, and professional memberships directly related to your business.
Business travel 100% deductible. Business meals 50% deductible with proper documentation.
These are the figures that apply to the return you file in 2026 (tax year 2025). Software often carries stale limits; we apply the current ones and calculate each deduction two ways where the law allows, then use whichever saves you more.
| Deduction | 2025 rule / limit | What to know |
|---|---|---|
| Home office (simplified) | $5/sq ft, up to 300 sq ft ($1,500 cap) | Space must be used regularly and exclusively for business. |
| Home office (actual) | Home expenses × business-use % | Often beats the simplified method for larger spaces — we compute both. |
| Vehicle — standard mileage | 70¢/mile (2025) | Requires a mileage log. Frequently the second-biggest deduction. |
| Vehicle — actual expenses | Actual costs × business-use % | Gas, insurance, repairs, depreciation. Better for expensive vehicles. |
| SEP-IRA | Up to 25% of net SE income, max $70,000 | Fully deductible; the most powerful reducer for high earners. |
| Solo 401(k) | Up to $70,000 (+$7,500 catch-up at 50+; $11,250 at 60–63) | Employee deferral + employer profit-share combined. |
| Health insurance premiums | 100% above-the-line | You, spouse, dependents — if no employer plan was available. |
| HSA (with HDHP) | $4,300 self / $8,550 family (+$1,000 at 55+) | Triple tax advantage; deductible, grows tax-free, tax-free medical use. |
| Qualified Business Income (QBI) | Up to 20% of qualified income | Thresholds and business-type limits apply; verify by hand. |
| Section 179 equipment | Up to $1,250,000 (2025) | Deduct full cost in year of purchase — computers, tools, machinery. |
| ½ self-employment tax | 50% of SE tax paid | Automatic above-the-line adjustment; reduces income tax. |
| Business meals | 50% deductible | Needs date, amount, and business purpose. |
| Phone & internet | Business-use % of the bill | 70% business use = 70% deductible. |
Self-employed people pay 15.3% self-employment tax (12.4% Social Security up to the 2025 wage base of $176,100, plus 2.9% Medicare) on top of regular income tax. That's the number that makes self-employment feel so heavily taxed — and it's the number most preparers never try to reduce.
Once your business nets roughly $50,000 or more, electing S-Corp status can carve a large share of your profit out of that 15.3% tax by splitting it into reasonable salary (taxed) and distributions (not subject to SE tax). For many clients that's $5,000–$15,000 back every year. Pair it with a SEP-IRA or Solo 401(k) and year-round tax planning, and the combined savings often dwarf what any single deduction delivers.
You do not need to catalog every coffee. You need defensible records for the categories you claim: bank and card statements, receipts for larger purchases, a mileage log, and — most importantly — a clean separation between business and personal accounts. Run business income and expenses through a dedicated account and most of your substantiation happens automatically. When we prepare your return we tell you exactly which records to keep for the deductions you're taking, so a future IRS question is a non-event. See our self-employed tax prep and online tax preparation pages for how the remote process works.
Tell us your situation. We show you exactly how much more you should be keeping.
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