Some tax deductions for self-employed people include the self-employment tax deduction, home office tax deduction, and a deduction for the cost of Internet and phone, reports Investopedia. Other deductions include deductions for health insurance premiums, meals while traveling for business or when entertaining a business client, and business travel and entertainment expenses. Self-employed people can also deduct for the business use of a vehicle and any interest paid on a business loan. Continue Reading
Additional deductions for the self-employed include deduction of educational expenses related to improving skills needed for the business, advises Investopedia. Businesses may also deduct the cost of journals, books and magazines used directly in the business. Self-employed people can also deduct contributions made to solo 401(k) plans, SIMPLE individual retirement accounts (IRAs), and SEP-IRAs.
The deduction for use of the home for business is a complicated deduction, reports Investopedia.com. To take it, a self-employed person must use a workspace in the home regularly and only for business purposes. The deduction is available for both renters and homeowners, and is based on the home's square footage and the amount of space allotted for the workstation or home office. The deduction is figured based on the percentage of the home the office uses. For example, if the home is 1,000 square feet in size, and the home office takes up 100 square feet, then the deduction is 10 percent. This includes 10 percent of utilities, property taxes and other costs.Learn more about Taxes