Self-Employed Tax Deductions: The Big Ones to Know
The self-employed tax deductions freelancers and contractors miss most — home office, mileage, health insurance, retirement, the SE-tax deduction, and more.
✓ Fact-checked & reviewed by BestLoanCompanyReview Editorial Team
When you work for yourself, the tax code gives back some of what
self-employment tax takes. The catch: nobody hands you these write-offs — you have
to know them and document them. Here are the self-employed tax deductions
freelancers and contractors most often miss, in plain English.
First, how self-employment tax works
As an employee, you and your employer split Social Security and Medicare taxes.
When you’re self-employed, you pay both halves — that’s self-employment tax,
15.3% of your net business earnings (12.4% for Social Security up to a yearly
wage base, plus 2.9% for Medicare on everything). The good news: you automatically
deduct half of that SE tax as an adjustment to income, before you even get to
the deductions below.
The home office deduction
If you use part of your home regularly and exclusively for business, you can
deduct it — whether you rent or own. Two methods:
Simplified: a flat rate per square foot of office space, up to a cap.
Regular: the business percentage of your actual home costs (rent/mortgage
interest, utilities, insurance).
Run both and take the larger; the simplified method is far less paperwork.
Vehicle and mileage
Driving for work? Deduct it two ways:
Standard mileage rate — multiply business miles by the IRS rate (the IRS
updates this rate each year). Simple, and usually generous.
Actual expenses — the business share of gas, maintenance, insurance, and
depreciation.
Either way, log your business miles — date, destination, purpose. Commuting to
a regular workplace doesn’t count.
Self-employed health insurance
If you pay for your own health insurance and aren’t eligible for a spouse’s
employer plan, you can generally deduct your premiums (medical, dental, and
qualifying long-term care) as an adjustment to income — a valuable write-off many
freelancers overlook.
Retirement contributions
Saving for retirement lowers this year’s taxable income too. Self-employed options
let you contribute far more than a standard IRA:
SEP-IRA — simple to set up; contribute a percentage of net earnings.
Solo 401(k) — lets you contribute as both “employee” and “employer,” often
allowing the largest contribution.
Everyday business expenses
These add up fast and are easy to forget:
Software, apps, and subscriptions you use for work
Supplies and equipment
A reasonable share of your phone and internet
Professional services (accountant, legal), education, and business insurance
Marketing, website, and platform/processing fees
The rule of thumb: an expense must be ordinary and necessary for your business.
Don’t forget quarterly estimated taxes
Because no employer is withholding tax for you, the IRS expects you to pay as you
go.
Keep records like it’s an audit
A deduction you can’t prove is a deduction you can lose. Keep receipts, a mileage
log, and a clean separation between business and personal spending (a dedicated
business account helps). Good tax software — see our
best tax software for the self-employed —
can track much of this for you.
The bottom line
The self-employed pay more in payroll-style tax, but the deductions above —
home office, mileage, health insurance, retirement, and everyday business costs —
claw a lot of it back. Track everything, pay your quarterlies, and claim what
you’re entitled to. This is educational information, not tax advice; a CPA or
enrolled agent can confirm what applies to your situation. New to filing? Start
with How to File Taxes for the First Time
or browse our Taxes guides.
Get the free Beginner Money Checklist
Start taking control of your money today. Get simple budgeting, saving, and credit tips sent to your inbox.
By subscribing you agree to our Privacy Policy. Unsubscribe anytime.
Frequently asked questions
What can I write off as a self-employed person?
Ordinary and necessary business expenses: a home office, business mileage, health insurance premiums, retirement contributions, supplies, software and subscriptions, professional fees, and a share of your phone and internet. You also deduct half of your self-employment tax automatically.
How does self-employment tax work?
Self-employment tax is 15.3% (12.4% for Social Security up to an annual wage base, plus 2.9% for Medicare on all net earnings). It covers what an employer and employee would normally split. The upside: you deduct the 'employer half' as an adjustment to income.
Do I have to pay taxes quarterly if I'm self-employed?
Generally, if you expect to owe $1,000 or more, you must make quarterly estimated tax payments using Form 1040-ES. Skipping them can trigger an underpayment penalty even if you pay in full at tax time. See the IRS estimated taxes page.
Can I deduct my home office if I rent?
Yes. The home office deduction is available whether you rent or own, as long as you use the space regularly and exclusively for business. You can use the simplified method (a set rate per square foot, up to a cap) or the regular method (a percentage of actual home costs).
The BestLoanCompanyReview Editorial Team reviews content for clarity, usefulness, and accuracy before publication. The team focuses on keeping articles easy to understand, properly disclosed, and helpful for readers learning personal finance basics.
This article may include affiliate links. Editorial opinions remain independent.
BestLoanCompanyReview.com provides educational content only and does not provide personalized financial, legal, tax, credit repair, or investment advice.
BestLoanCompanyReview.com provides educational content only. Our writers are not providing personalized financial, legal, tax, credit repair, or investment advice. Always consult a qualified professional before making financial decisions based on your personal situation.
Get the free Beginner Money Checklist
Start taking control of your money today. Get simple budgeting, saving, and credit tips sent to your inbox.
By subscribing you agree to our Privacy Policy. Unsubscribe anytime.
We use essential cookies to run BestLoanCompanyReview. With your consent, we also use cookies for analytics
(Google Analytics 4) and, where enabled, advertising (Google AdSense). You can change your choices anytime.
See our Privacy Policy.
Cookie preferences
Choose which optional cookies we may set. Strictly necessary cookies are always active.
Strictly necessary
Required for basic site operation and security.
Always on
Helps us understand traffic and improve content (Google Analytics 4).
Supports free content through ads (Google AdSense, when enabled).