Guide to Tax Deductions for Self Employed | taxes

Are you self-employed and wondering how to maximize your tax deductions for the 2022 tax year? Here’s a look at 15 of the best tax write-offs you don’t want to miss:

  • Qualified work income.
  • Mileage or vehicle expenses.
  • retirement savings.
  • Insurance premiums.
  • office supplies.
  • home office expenses.
  • Credit card and loan interest.
  • Phone and internet costs.
  • Business meals.
  • business trip.
  • startup costs.
  • complete education.
  • Subscriptions and memberships.
  • Advertising.
  • Self-employment taxes.

Qualified business income

If you are a qualified business owner, the qualifying business income deduction allows you to deduct:

  • Up to 20% of your QBI – the net amount of taxable income you earn from a qualifying trade or business.
  • Up to 20% of qualifying publicly traded partnership income and real estate investment earnings.

If you operate as a sole proprietor or through a partnership, S Corp, Trust or Estate, you may qualify. C Corp employees and owners are not eligible.

Mileage and vehicle expenses

If you use one or more vehicles for business purposes, you may be able to deduct costs using the standard mileage rate or the actual cost method.

If you qualify for the standard mileage rate, multiply your miles to work by the applicable rate.

“In 2022, the standard IRS mileage rate was 58.5 cents (January 1-June 30) and 62.5 cents (July 1-December 31),” says Moira Corcoran, a certified public accountant.

If you are using the actual cost method, add the actual qualifying vehicle expenses and deduct the total amount. Eligible expenses include licenses, depreciation, gas, rental payments, oil, tolls, parking and registration fees, insurance, tires, garage rent, and repairs.

When you qualify for both methods, the IRS recommends calculating your deduction for both methods to see which is greater.

retirement savings

Saving for your future can also be tax deductible.

“Self-employed people have many options for extracting money into a tax-advantaged retirement account, including SEP IRAs, Traditional IRAs, SIMPLE IRAs and Solo 401(k)s,” says CPA and Certified Financial Planner Taylor Jesse.

Solo 401(k)s are particularly attractive because they work very similarly to the traditional 401(k) plan offered by most companies. In 2022, a self-employed person could contribute up to $61,000 to each one.

Whether you can discount your contributionsHowever, it will depend on factors including the type of retirement plan you choose, your tax filing status, and income level. For example, Roth IRA contributions are not tax deductible. And while Traditional IRA contributions can be deductible, income limits apply if you or your spouse are covered by an employer’s retirement plan.

Insurance premiums

You can often deduct premiums for different policy types, including but not limited to:

  • Commercial liability insurance.
  • Malpractice insurance.
  • Trade credit insurance.
  • Employment insurance against damages due to fire, accident, storm, theft, etc.
  • Auto insurance for commercial vehicles.
  • Business interruption insurance.
  • Personal medical insurance.
  • Personal dental insurance.

“Health insurance costs are an above-the-line deductible that affects every account below the AGI,” says Zachary B.

Also, be aware of if You are on Medicare And because you’re self-employed, you can deduct it as self-employed health insurance. Many tax preparers miss out on this deduction.”

office supplies

Don’t forget all the articles and office supplies Purchase for your business throughout the year such as paper, pens, printer ink, and packaging supplies.

If you used it during the tax year, you can generally deduct it. If the usefulness of an item extends long after the end of the year, you can use the depreciation method.

Ministry of Interior expenses

If you have a dedicated workspace in your home, you might be able to Home office expense deduction Such as utilities, repairs and maintenance, rent and mortgage interest.

The IRS offers two ways to calculate the home office deduction:

  • The simplified method: $5 per square foot, up to 300 square feet.
  • The normal way: An amount based on your expenses and the proportion of your home you set aside for business use.

Again, calculate the discount using both methods to see what works best for your situation.

Credit card and loan interest

If you are Use a credit card Or take out a loan for business purposes, you can often deduct the interest fee. However, the deduction you take cannot exceed your taxable income, 30% of your adjusted taxable income or floor plan financing interest expense (the interest charge that accrues when you buy cars to sell or lease using a loan secured by the acquiring company’s inventory) for the year .

Phone and internet costs

You can deduct phone and internet expenses but only the percentage you use for business. In addition, basic local phone service for your first home phone line is not deductible, even if it is in your office.

Business meals

For business meals to be tax deductible, the business owner or employee must be present for the meal and it cannot be extravagant. If you had a qualifying meal as of 2022, you can generally deduct the full cost, including taxes and gratuities. The 100% discount is an exception, however, for the 2021 and 2022 tax years. The typical limit for the discount is 50% of the cost of the meal.

business trip

When traveling to another city is normal and necessary for your business, you may be able to deduct expenses such as plane ticketsMeals and lodging as long as they are not outrageous. However, keep in mind that your work assignment must be temporary – it cannot require you to be away from your primary residence for more than a year.

startup costs

Did you start a new project this year and incur costs before operations started? You can usually deduct up to $5,000 in startup costs but this limit is reduced if your expenses exceed $50,000. You can amortize the remaining relatively non-deductible startup costs over a 180-month period (once your business becomes active).

complete education

If you’ve invested in maintaining or improving the skills you need to run your business, you may be able to deduct those education expenses. Tuition, books, supplies, transportation, and more may all be deductible if you are self-employed. The IRS provides work-related education a tool To help you find out if your expenses qualify.

Subscriptions and memberships

“If you incurred expenses for subscriptions related to your business, such as industry magazines or online research tools, you may be able to claim a deduction for those costs,” Andrew Lockinoth, a tax preparer and assistant professor at the University of San Francisco School of Management, tells SELF.

Membership fees in any club organized for business, leisure, pleasure or any other social purpose, however, are generally not deducted.


Did you spend money on advertising or marketing your business this year? These costs can include activities such as running ads, building a website, hiring a social media manager, and taking brand photos. As long as the costs are common and necessary in your industry, you can probably deduct them.

Self-employment tax

One of the downsides of being your own boss is Self-employment tax. It’s currently at 15.3%, which breaks down to 12.4% for Social Security and 2.9% for Medicare.

The good news? You can generally deduct half of it when calculating adjusted gross income. While this will not affect your net earnings from self-employment or your tax liability, it will reduce your income tax return.

The bottom line is in the tax cuts

What should you keep in mind as you file your taxes this year? “The general rule is that any expenses paid that are normal and reasonable while doing business are deductible in the year in which they were paid (unless they apply to a future period),” says Andrew Griffith, CPA.

“In order for a tax deduction to survive an audit by the IRS or other income tax authority, good record-keeping practices and internal control must be maintained on an ongoing basis,” he says.

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