Self-employed Tax Hub
Last Updated: November 28, 2025
Being self-employed brings freedom, but it also means you are responsible for your own taxes. The good news is the IRS offers many deductions tailored for independent contractors and small business owners. These deductions reduce your taxable income, which can save you a lot of money. This guide will walk you through what you can deduct, how to claim it, and how to keep your records straight.
Table of Contents
List of Key Tax Deductions You Should Know
Many expenses you pay to run your business can be deducted. Here are some of the most common and impactful ones:
Home Office Deduction
If you use a part of your home exclusively and regularly for your business, you can deduct a portion of your home expenses. This includes rent, mortgage interest, utilities, and repairs. For example, if your home office is 200 sq ft and your home is 1,000 sq ft, you could deduct 20% of these costs. This is based on principles shared by resources like Everlance and TurboTax.
Self-Employment Tax Deduction
This is a big one. You pay a 15.3% self-employment tax on your net earnings. But you can deduct one-half (50%) of this tax on your income tax return. This helps ease the burden of paying both the employer and employee share of Social Security and Medicare taxes. Rippling and NerdWallet both confirm this important deduction.
Health Insurance Premiums
If you pay for your own health insurance and are not eligible for coverage through an employer (yours or your spouse’s), you can deduct 100% of the premiums. This includes coverage for yourself, your spouse, and your dependents. You can find more details on this vital deduction from TurboTax and NerdWallet.
Qualified Business Income (QBI) Deduction
Eligible self-employed individuals can deduct up to 20% of their qualified business income. This deduction is subject to income phase-outs. For 2025, phase-outs start at $182,500 for single filers and $365,000 for married couples filing jointly. Everlance and NerdWallet highlight the impact of this deduction.
Retirement Plan Contributions
Saving for retirement is smart, and it can also save you on self-employed taxes. Contributions to plans like SEP IRAs, SIMPLE IRAs, and Solo 401(k)s are deductible up to annual limits. TurboTax provides guidance on these limits.
Business Insurance Premiums
Insurance protects your business, and the premiums you pay for business liability, property insurance, or vehicle insurance used for business are deductible. Rippling and NerdWallet offer insights into various business insurance deductions.
Education and Professional Development
Costs for courses, certifications, and books directly related to improving your business skills are deductible. Everlance points out the value of investing in yourself and your business.
Taxes and License Fees
State and local taxes, sales taxes, property taxes, and any regulatory fees directly tied to your business are often deductible. TurboTax confirms this broad category of deductions.
Travel and Vehicle Expenses
If you use your car for business, you can deduct mileage, tolls, and parking. This falls under business travel costs. Everlance is a great tool for tracking these expenses effortlessly.
Self-Employed Tax Write-offs Overview
Key Statistics and Facts for 2025
Understanding these numbers can help you plan better:
Self-Employment Tax Rate
Still 15.3% (7.65% for Social Security and 7.65% for Medicare) on your net earnings. OnPay and the IRS are key sources for this information.
QBI Deduction Phase-Outs (2025)
- Single filers: $182,500
- Married filers: $365,000 These figures are crucial for determining your QBI deduction eligibility, as highlighted by Everlance and NerdWallet.
Home Office Deduction
A simple rule of thumb is if 20% of your home is used for business, you can deduct around 20% of related home expenses. Everlance and TurboTax offer methods for calculating this.
Health Insurance Deduction
Still 100% deductible for self-employed individuals who do not have other employer-sponsored coverage options. This important detail is confirmed by TurboTax and NerdWallet.
Retirement Plan Contribution Limits (2025)
- SEP IRA: Up to 25% of compensation, or $66,000, whichever is less.
- Solo 401(k): Up to $66,000, combining both employee and employer contributions. These limits are important for maximizing your retirement savings and tax benefits, according to TurboTax.
Other Important Considerations
Estimated Taxes
As a self-employed individual, you usually need to pay estimated taxes quarterly. This helps you avoid penalties at tax time.
Recordkeeping
This is vital. Keep clear, accurate records of all your income and expenses. The IRS often focuses on mileage logs, home office expenses, and business meals during audits.
IRS Resources
The IRS offers a wealth of information. Check out the IRS Self-Employed Individuals Tax Center for official guidance. You can also watch helpful videos like this one from Gusto on Self-employed Tax Write-offs You Can Get.
Streamlining Your Self-Employed Tax Deductions with MileageWise
One of the biggest areas for self-employed tax deductions is vehicle expenses. Keeping track of every business trip can feel overwhelming. That is where MileageWise steps in, helping you create IRS-compliant mileage logs effortlessly.
MileageWise offers smart solutions designed to simplify mileage tracking and help you maximize your deductions:
Mobile App for Tracking Mileage
- Automatic Mileage Tracking: Capture every work-related drive automatically without thinking about it.
- Fast Setup: Start tracking in minutes and keep your attention on earning, not figuring out tech.
- Ad-Free & Private: Track your business miles without ads, pop-ups, or data-sharing concerns.
- Reliable Backup Tracking: Pinpoints where trips began, tackling issues that make other apps miss them.
- Flexible Distance Options: Choose exact route tracking or optimized distance calculation.
- Routing with Waze: Use Waze for navigation while MileageWise logs your trip.
- Expense Integration: Keep business miles and expenses in one place to simplify tax season.
Platform for a Retroactive Mileage Log
- Google Maps Timeline Import: Bring in your location history to fill in days when you forgot to track or create mileage logs for audits
- AI Mileage Rebuilder: Recreate past work trips automatically, saving hours of manual entry. Choose your mileage, deduction amount, and set other preferences.
- IRS Compliance Check: Review your mileage log for compliance and common mistakes so you stay confident at tax time.
- Bulk Client & Trip Import: Upload your customer list or set standard routes to speed up setup.
- Smart Trip Management: Batch edit, organize recurring drives, and keep your records clean and up to date.
Try MileageWise for free for 14 days. No credit card required!
Automatic Mileage Tracker App
Customer Story: Google Timeline Saved My Deductions
As a DoorDasher, I spend most of my day driving between restaurants and clients, and keeping track of my miles used to be a constant headache. I tried different mileage trackers over the years, but I always forgot to turn them on, or they missed half my trips. When tax season came around, I’d stress about losing money on my 1099 tax deductions simply because my mileage log wasn’t complete.
This year I found a better way. Google already recorded my routes through Timeline, but I never knew how to use that data for taxes. MileageWise’s Google Timeline import changed everything. I pulled in my past drives directly from my phone, reviewed them on the dashboard, and turned all those forgotten trips into a clean, IRS-ready mileage log.
For the first time, I felt confident that I wasn’t leaving money on the table. My drives were finally documented, and my self-employed deductions reflected the miles I actually worked.
Conclusion: The Smart Way to Track Miles
Understanding and claiming self-employed tax deductions is key to keeping more of what you earn. Make sure you stay updated on IRS rules, track your business income and expenses accurately, and keep organized records of receipts and statements. Know which deductions apply to your work, especially mileage, and use tools like MileageWise to automate tracking and stay compliant. If your situation feels complicated, a tax professional can help you avoid mistakes and maximize your savings.
FAQ
What counts as a deductible business expense?
Anything that is ordinary for your type of work and necessary to run your business. Common examples: supplies, software, advertising, insurance, phone and internet (business portion), travel, business meals, education for your current work, taxes and licenses, and equipment.
Do I need to itemize to claim self-employed deductions?
No. You claim them on Schedule C, which reduces your business profit. That profit then flows to your Form 1040.
How does self-employment tax work, and is any of it deductible?
You pay 15.3% for Social Security and Medicare on your net earnings. You can deduct half of your SE tax on Form 1040.
Can I take the home office deduction?
Yes, if you have a space at home that is used regularly and exclusively for business. You can use the simplified method ($5 per sq. ft.) or deduct a percentage of actual home expenses.
How do vehicle deductions work?
You can use the standard mileage rate or actual expenses. A mileage log is required, and commuting miles are not deductible. Parking and tolls are not covered by the mileage rate and must be separately deducted.
Can I deduct health insurance and HSA contributions?
You may deduct health, dental, and vision premiums you pay, as long as you’re not eligible for an employer plan. HSA contributions are deductible if you have a qualifying high-deductible plan.
What retirement contributions are deductible?
Plans like a Solo 401(k), SEP IRA, or SIMPLE IRA allow deductible contributions. Limits depend on your income and the plan.
What is the 20% QBI deduction?
Many sole proprietors can deduct up to 20% of their qualified business income. It’s limited to higher incomes and taken on Form 1040, not Schedule C.
How do I deduct equipment and software?
You can deduct them using Section 179, bonus depreciation, or the de minimis rule for low-cost items.
