Are you freelancers, contractors, and other self-employed people who work for themselves? Here are some of the self-employment tax deductions to remember.
The home 🏡 office deduction.
If you work from your home or use part of it in your business, then self-employment tax deductions like this one could get you a break on the cost of keeping the lights on.
What you can deduct:
1. A portion of your mortgage or rent;
2. property taxes; the cost of utilities, repairs, and maintenance; and similar expenses.
Generally, this deduction is only available to the self-employed; employees typically cannot take the home office deduction.
How it works:
1. Calculate the percentage of your home's square footage that you use, in the IRS’s words, “exclusively and regularly” for business-related activities. That percentage of your mortgage or rent, for example, becomes deductible. So if your home office takes up 10% of your entire square footage, 10% of those housing expenses for the year may be deductible. IRS Publication 587 outlines many scenarios, but note that only expenses directly related to the part of your home you use for business — say, fixing a busted window in your home office — are usually fully deductible.
Do you want to know more? Contact our tax experts to learn more about the 2022 self-employment deductions.
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