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If you have a considerable amount of experience in a particular industry, working as a consultant will be more lucrative than working for a company. This makes branching out on your own incredibly appealing, but there is one major drawback to consider. Self-employed individuals might make more on the front end, but they also have to pay more come tax time because of their payroll obligations, like the Social Security tax. Fortunately, a seasoned accountant can help reduce your overall tax burden by ensuring you are taking all applicable deductions, including the following. 

3 Lucrative Tax Deductions for Self-Employed Workers 

1. Home Office Expenses

There are a few different formulas for calculating total home office expenses, and an accountant can recommend the one that results in the largest deduction. To get started, you need to know the square footage of your office and house. Regardless if you have a designated home office, you can also deduct the cost of office supplies, as well as a portion of your internet and phone bills, as long as you use both utilities to conduct business at home. 

accountant2. Client Meetings 

Depending on your line of work, you may need to take clients out to lunch at various stages of a project. Self-employed individuals can deduct 50% of all meals that they share with clients. To take this deduction, though, it is critical to keep accurate records of every meeting. Write down who attended the lunch or dinner and what was discussed, then file the receipt until tax time. 

3. Travel Expenses

Short-term travel expenses are deductible when the trip relates to your business. Keep receipts from all travel-related transactions, so you have proof of applicable costs at the end of the year. Additionally, if you use a personal vehicle for business purposes on a regular basis, track the mileage because you can deduct a portion of the costs associated with maintaining it. 

 

If you’re self-employed, an Enrolled Agent from Burch & Associates, Inc. will ensure you are taking advantage of every possible deduction. Based in Lincoln, NE, this accounting firm is proud to provide comprehensive tax return preparation for both individuals and businesses. Visit their website to explore all the tax services they offer or call (402) 483-4791 to make an appointment with a knowledgeable accountant on their team today. 

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