Olde Hornet
Well-Known Member
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Most-Overlooked Tax Breaks and Deductions for the Self-Employed
Running your own business is hard. Don’t miss out on your well-earned deductions when tax season comes around.
Whether you are fully self-employed or do some freelancing in addition to your job as an employee, if you work at home the government might subsidize what are generally considered personal expenses.
The key to the home-office deduction is to use part of your home or apartment regularly and exclusively for your moneymaking endeavor. Pass that test and part of your utility bills and insurance costs can be deducted against your business income. You can also write off part of your rent or, if you own your home, depreciation (a noncash expense that can save you real money on your tax bill).
Many work-at-home taxpayers skip this break, either because they don’t know about it, are afraid claiming it will trigger an audit, or are put off by the recordkeeping hassle necessary to back up the deduction if challenged. In recent years, though, the IRS has come up with a simplified method that allows taxpayers to deduct $5 for every square foot that qualifies for the deduction. If you have a 300-square-foot home office (the maximum size allowed for this method), your deduction is $1,500. You get this tax-saver every year you have a qualifying home office.