15 Tax Deductions Self-Employed People Forget to Claim

Self-employed filers pay both halves of payroll tax, which makes every legitimate deduction worth roughly 30% more than it would for a W-2 employee. Yet many deductions go unclaimed simply because they are unfamiliar.

Home office, mileage, health insurance premiums, and retirement contributions are the well-known ones. The often-missed list includes: software subscriptions, phone and internet (business portion), professional development and courses, business insurance, bank and payment processor fees, subcontractor payments, advertising and marketing, legal and professional services, supplies, business meals (50%), and depreciation on equipment.

The qualified business income (QBI) deduction is another frequently overlooked benefit. It can deduct up to 20% of qualified business income, subject to income thresholds and limitations — and you do not have to itemize to claim it.

The unifying rule is ordinary and necessary. An expense must be common and helpful for your trade, and you must keep records that prove it. Receipts, mileage logs, and account statements are your defense if the IRS asks.

When in doubt, document it and ask your preparer. A five-minute conversation about an expense is far cheaper than leaving a legitimate deduction on the table.