Self-Employed Tax Deductions: A Complete Guide
Master business deductions and cut your self-employment tax burden.
Why Self-Employed Tax Deductions Matter
Self-employed individuals pay both the employee and employer portion of Social Security and Medicare taxes (15.3% combined). By maximizing business deductions, you reduce net profit and lower both income tax and self-employment tax—potentially saving thousands annually.
Key Business Deductions
Home Office Deduction
Deduct a percentage of rent/mortgage, utilities, and internet based on square footage. Use the simplified method ($5 per sq ft, max 300 sq ft) or actual expense method.
Vehicle and Travel Expenses
Use standard mileage rate ($0.67 per mile in 2026) or actual expenses for business travel. Meals and entertainment are 50% deductible.
Equipment and Supplies
Computers, software, office furniture, and supplies are fully deductible in the year purchased (if under $2,500).
Professional Services
Accounting, legal, marketing, and consulting services for your business are 100% deductible.
Quarterly Estimated Tax Payments
Self-employed individuals must pay estimated quarterly taxes. This prevents penalties and ensures you're not hit with a large bill at tax time. Calculate your estimated tax liability and divide into four quarterly payments due on:
- Q1 (Jan-Mar): Due April 15
- Q2 (Apr-Jun): Due June 15
- Q3 (Jul-Sep): Due September 15
- Q4 (Oct-Dec): Due January 15 (next year)
Recordkeeping Best Practices
- ✓ Keep all receipts and invoices for 3-7 years
- ✓ Track mileage with a dedicated log or app
- ✓ Separate business and personal accounts
- ✓ Document home office square footage
- ✓ Maintain a business expense spreadsheet
- ✓ Save all 1099 forms from clients
Self-Employment Tax vs Income Tax
These are separate calculations:
- Self-Employment Tax (15.3%): Covers Social Security and Medicare. You pay 100% (no employer match).
- Income Tax: Progressive federal tax based on your tax bracket. You can reduce this with deductions, credits, and retirement contributions.
The good news: You can deduct half of self-employment tax paid as an adjustment to income.
Need Help with Your Taxes?
Self-employed tax situations are complex. Consider consulting a tax professional or using our calculators to estimate your liability.
Estimate Your Deductions