Tax prep can be stressful for business owners and freelancers alike. While deductions save entrepreneurs money on their tax liability each year, they can also be difficult to understand, making it easy for individuals to overlook and potentially miss out on their benefits. If you're self-employed, use the guide below for exclusive tax breaks that can save you money during this time.

A Guide to Tax Breaks If You’re Self-Employed

1. Self-Employment Tax Deduction

Typically, when you work a traditional job, your employer covers half of your FICA taxes, including Medicare and Social Security. Self-employed workers are responsible for paying this entire tax (15.3%) on their own.

Fortunately, the IRS considers the employer portion of the self-employment tax as a deductible, above-the-line expense, meaning you can claim it on your tax return regardless of whether you're itemizing deductions. 

2. Health Insurance Deduction

If you paid health, dental, or long-term care insurance premiums, you may qualify for valuable insurance deductibles for yourself and dependents under the age of 27.

To qualify for the deduction, you cannot have been enrolled in an employee-paid healthcare plan, such as a spouse's plan, and you must maintain a net profit from your self-employment. If eligible, this deduction will reduce your adjusted gross income and lower your overall taxable income. 

3. Home Office Deduction

If you work from a dedicated home office, you may be able to deduct a portion of your expenses for things you use exclusively for your business, such as square footage, property taxes, and qualifying utilities. While convenient, this deduction can be complex. Unless you're experienced, it's advisable to work with an accountant during tax prep.

To claim this deduction, you must prove that you only use the space for business purposes, and provide itemized receipts for any expense you write off, such as phone bills, insurance costs, utilities, and maintenance. 

If you're self-employed, contact JJR & Associates LLC in Fayetteville, GA for professional tax prep that will save you money. Their team of knowledgable certified public accountants knows the ins and outs of tax deductions for small business owners and freelancers in every stage of the business process. Contact them today at (404) 437-7748 to schedule an appointment, or visit their website to learn more about their services.