What are some deductions for self-employed taxpayers?


Quick Answer

Examples of deductions for self-employed taxpayers include having an individual retirement account, using a residence for business, using a vehicle for business purposes, the decreasing value of business equipment, and property and educational expenses, according to TurboTax. Self-employed individuals can also deduct expenses for business advertisement and health insurance premiums.

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What are some deductions for self-employed taxpayers?
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Full Answer

Setting up an individual retirement plan is one of the most recommended tax deductions for self-employed individuals, notes TurboTax. Self-employed taxpayers who have employees can establish either a savings incentive match plan for employees IRA or a simplified employee pension IRA.

Self-employed taxpayers claiming a residence as a deduction have to make note of all expenses dealing with the cost of housing, according to TurboTax. The taxpayer may have to show proof that a specific part of a dwelling or housing cost is used or related to business in order to qualify for a deduction. Examples of expenses that count toward such a deduction include the Internet, phone lines and the cost of conducting a home-based business.

When deducting automobile business expenses, the taxpayer can either use the IRS mileage rate or use the actual incurred expenses, notes TurboTax. Items that should be included with incurred expenses include registration, vehicle depreciation, garage rent and repairs. Those who decide to use the government's mileage rage should log the total number of miles driven for business purposes.

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