Self-Employment Tax Deductions You May Be Missing

There are a number of positives to being self-employed. Number one is you get to make all of the decisions and are your own boss. Number two is that you get to control your own pay. A downside to being self-employed and owning your own business is having to pay taxes on your earnings. This isn't the same type of taxes as when you are employed with a company. You have to pay a self-employment tax that can be quite a shock if you aren't prepared. To help off-set these taxes, there are several deductions you can claim (another positive). See below for a handful of these deductions.

Internet and Phone

You can deduct the expenses from your Internet and phone if you used them for your business. This is true even if you work from home, so if you're a self-employed writer, blogger, or telemarketer, keep track of your usage and claim it on your taxes. It is best to have a separate line for your business; this is easier to keep track of.

Home Office 

Do you use an office at home for your business, or do you use rent a space to use as your office? Either way, you can deduct the cost. No, you can't deduct your entire mortgage if you work from home, but you can deduct a percentage. However, the area where you have your office space must be exclusively used for business purposes, not for personal usage. 

Necessities and Expenses

Necessities and expenses you use to keep your business going, such as paper and pens, shipping expenses, mileage, and even dinner with clients can all be deducted. Be sure to keep track of receipts used when purchasing items for your business. Try to purchase these items separately from your personal items to help keep you better organized. Use a credit card solely for the use of business expenses; this way you always have a record of what was purchased on all of your statements.

Try your best to stay organized to help with your taxes. This means keeping track of receipts, using a separate bank account if need be, and using a spreadsheet to help keep you organized. This not only helps you but also will help your accountant weed through your expenses to help get all of the deductions you are allowed and keep your tax bill down. The shock of your self-employment tax bill won't be so shocking this way. Talk to your accountant or business-tax professional about other tax deductions you may qualify for.