What are the most overlooked deductions self-employed people miss?
Beyond obvious supplies and software, several valuable deductions routinely slip by. The home-office deduction lets you write off a portion of rent, utilities, and insurance based on the square footage used regularly and exclusively for business. Self-employed health insurance premiums are deductible above the line, reducing your adjusted gross income. Retirement contributions to a Solo 401(k) or SEP cut taxable income directly. You can deduct half of your self-employment tax. Business use of your car — via mileage or actual expenses — adds up if you track it. Other commonly missed ones include a portion of your phone and internet, professional development and subscriptions, business travel and a share of meals, bank and merchant fees, and startup costs. The catch is documentation: you can only claim what you've recorded, so a year-round expense-tracking habit is what actually unlocks these. Ask your tax preparer about any you're unsure of.