5 Deductions for Self-Employed Workers
1. Good accounting software- such as QuickBooks,® .
Do not forget to include business-related travel expenses, which are 100 % deductible, meals and entertainment, which are 50% deductible. Bank fees, educational expenses, advertising and interest payments on business credit cards are also deductible.
2. Home Office Deduction- home office deductions tend to receive a lot of attention from IRS auditors. The home address must be the principal place of business, and the room you set aside must be for business-use only. Your living room doesn’t count.
3. Depreciation- all assets can be depreciated, as long as they help generate income and are used for multiple years. Such as computer equipment .
4. Health Insurance. - you can deduct your health insurance payments, and may also be able to deduct health insurance premiums for the rest of your family and dependents.
5. Retirement Plans - you can save and deduct tax by investing in retirement plans such as 401(k)s, IRAs, SEPs and other savings plans. You save twice: once in the account and a second time when you deduct it from your income.