List of Tax Deductions for Self Employed

by Sean Mullin ; Updated September 11, 2015
Self-employed taxpayers have more available deductions than those working for a company.

Workers without an employer are still responsible for their taxes and for their contributions to Social Security and Medicare, and without an employer to make matching contributions and withhold taxes in advance, the tax burden for a self-employed worker may be high. To combat this imbalance, the U.S. tax code allows for special and expanded tax deductions specifically for the self-employed.

Self-employed taxpayers have more available deductions than those working for a company.

Workers without an employer are still responsible for their taxes and for their contributions to Social Security and Medicare, and without an employer to make matching contributions and withhold taxes in advance, the tax burden for a self-employed worker may be high. To combat this imbalance, the U.S. tax code allows for special and expanded tax deductions specifically for the self-employed.

Business Expenses

Whereas taxpayers employed at a company may only deduct business expenses that exceed 2 percent of their Adjusted Gross Income (AGI), self-employed taxpayers may deduct most business expenses without meeting a percentage of their income. Travel expenses, telephone charges, passports for business travel and the many other expenses that apply to company-based employees also apply to the self-employed. In addition, there are some business expenses that only the self-employed can claim, including interest on business loans, office rent, and maintenance costs for the workplace.

Insurance and Retirement

Self-employed workers must purchase their own health insurance, and according to H&R Block, the government will allow deductions of 100 percent of the premiums that the self-employed pay for themselves and their families. They can also deduct their contributions to retirement plans, including Simplified Employee Pension (SEP) plans and SIMPLE plans.

Social Security

Because their paychecks aren't making regular contributions to Social Security and Medicare, the self-employed must eventually make those contributions in the form of taxes at the end of the year. However, self-employed taxpayers can deduct half of the calculated contribution from their gross income, before they calculate their AGI. As the U.S. Social Security website points out, this mimics company-based employees' lack of responsibility for their employers' contributions to Social Security and Medicare.

About the Author

Sean Mullin has been creating online content since 2007. He also worked in an online writing center for college students. In addition to writing, Sean has a Master of Arts in classics and teaches Greek and Latin part-time at the college level.

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