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Make Note of these Tax-Deductible Expenses for the Self-Employed

Make Note of these Tax-Deductible Expenses for the Self-Employed

As a self-employed professional, you are well aware of the pros and cons of working for yourself. Regardless of your industry or how much money you earn, nothing changes the importance of understanding your tax situation.

There are many ways to reduce your taxable income, including a variety of deductible expenses.

With the year coming to an end, it is time to focus some attention on your tax situation. Once the calendar turns, it won’t be long before you are filing your final return.

These tax-deductible expenses could help reduce the amount of tax that you owe:

•    Self-employment tax deduction. If you want to learn more about this, including how it works, visit this page of the IRS website.
•    Home office. Do you work from home? If so, you have the right to deduct your workspace. Once again, the IRS shares plenty of information on this topic. You can visit this page for more on the deduction, including how much space you can deduct.
•    Health insurance premiums. Self-employed workers are often responsible for their own health insurance. The only way around this is if you are eligible to receive coverage through a spouse’s employer sponsored plan. If this is not available to you, you can deduct health insurance premiums.

While the above tax-deductible expenses are among the most common, there are many others to consider:

•    Entertainment and meals associated with client meetings.
•    Phone and internet expenses.
•    Use of your vehicle (but only for business reasons).

When you decide to work as a self-employed professional, your tax situation will change in a number of ways. To lessen your tax burden, take advantage of as many tax-deductible expenses as possible.

Final tip: hire an accountant who has experience working with self-employed professionals. This person knows the ins and outs of the law, which can help save you a lot of money.

 

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Comments 1

Frank on Friday, 20 November 2015 16:55

Below is the IRS link to the home office deduction you referenced.

https://www.irs.gov/Businesses/Small-Businesses-&-Self-Employed/Home-Office-Deduction

I would also agree with Chris that if you have a more complex self-employed business to consult with a professional accountant/CPA who has direct tax experience of small businesses

Below is the IRS link to the home office deduction you referenced. https://www.irs.gov/Businesses/Small-Businesses-&-Self-Employed/Home-Office-Deduction I would also agree with Chris that if you have a more complex self-employed business to consult with a professional accountant/CPA who has direct tax experience of small businesses
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