Self-Employed Tax Guide for the Self-Employed: Everything You Need to Know Read the Article Open Share Drawer Share this:Click to share on Facebook (Opens in new window)Click to share on Twitter (Opens in new window)Click to share on LinkedIn (Opens in new window)Click to share on Pinterest (Opens in new window)Click to print (Opens in new window) Written by TurboTaxLisa Modified Mar 21, 2022 4 min read You’ve just stepped into the world of entrepreneurship. Whether you opened your own online boutique, began freelancing your graphic design skills, or drove for a ride-share company, you have a variety of tax implications to consider – and some of them can slim down your tax bill. Before learning about the ins and outs of filing taxes as a self-employed individual, know that you don’t need to worry about remembering all of this come tax time. TurboTax Live Self-Employed tax experts are available via one-way-video with unlimited tax advice for your personal and business income and expenses, and can help you get industry specific tax deductions and credits you’re eligible for. You can even just fully hand over your taxes to a TurboTax Live tax expert who can do them from start to finish — all from the comfort of your home — with TurboTax Live Full Service. Home Offices Working from the comfort of your own home can help you maximize your tax write-offs. If you regularly and exclusively use a home office specifically for your business, you can claim the home office deduction related to that space. Expenses that may be deducted as part of the home office deduction include a portion of home-related expenses like real estate taxes, mortgage interest, rent, utilities and insurance, based on the square footage of your home office space. You can also deduct the entire cost of repairs and painting needed for your home office. Part Time Hires Are your kids out on holiday or a school break? Hire them! Sole proprietors who hire their kids to run deliveries, clean the office, answer phones or enter data can deduct those wages on Schedule C, as long as the compensation is reasonable for the type of work performed. Wages paid to children are exempt from Social Security and Medicare taxes if they are under 18, and they are not subject to federal unemployment tax if they are under 21. It’s also likely that your child will not owe income taxes on these wages, which lowers your family’s overall tax bill considerably. Retirement Planning Save for the future and on your tax bill, all at once! Opening a retirement plan can help lower your taxable income. The most common for self-employed is a Simplified Employee Pension Plan (SEP). You can put in up to the lesser of 25 percent of your net earnings from self-employment or $58,000 for 2021 ($61,000 for 2022) up until the extended October 15 tax deadline if you filed an extension and lower your 2021 taxes. Compare that to the $6,000 cap on IRA contributions ($7,000 if 50 and over) for 2021 that have to be made by the April 18 extended tax deadline. Mileage is Money While employees of a regular nine-to-five job cannot deduct the cost of driving to and from work, you certainly can if you’re self-employed and driving to see a client, heading to a meeting, or going to work from another location. You can claim 56 cents per mile for 2021, plus the cost of parking and any tolls you paid. Be sure to track your business mileage so that you have substantiation for your mileage deduction. Business Trips Tip for the traveling pros: If you’re flying to another U.S. city primarily for business, you can deduct 100 percent of the travel costs. Remember that while you are traveling, you can also expense your hotel or lodging and your meals, though this can only be deducted for the days you’re spending on business. Under the Coronavirus Response and Relief Supplemental Appropriations Act passed on December 27, 2020, 100% of business meals (rather than the previous 50%) will be deductible beginning in tax year 2021 (the taxes you file in 2022) through tax year 2022 as long as the expense is for food or beverages provided by a restaurant. While dealing with your business and personal life can be busy sometimes, knowing these simple tips can help you easily find business deductions that will lower your taxes and help you save money for your business. If you still have questions, you can connect live via one-way-video to a TurboTax Live Self-Employed tax expert, with an average of 12 years experience, to get your tax questions answered. TurboTax Live Self-Employed tax experts are available in English and Spanish, year round, and can even review, sign and file your tax return. You can also use QuickBooks Self-Employed to track your income, expenses and mileage, and you can capture receipts year-round and then transfer your business information to your TurboTax Self-Employed tax return, making tax-time a breeze. Previous Post First Time Taxpayers: Your Go-to Guide For Filing Your Taxes Next Post Can I File Exempt & Still Get a Tax Refund? Written by Lisa Greene-Lewis Lisa has over 20 years of experience in tax preparation. Her success is attributed to being able to interpret tax laws and help clients better understand them. She has held positions as a public auditor, controller, and operations manager. Lisa has appeared on the Steve Harvey Show, the Ellen Show, and major news broadcast to break down tax laws and help taxpayers understand what tax laws mean to them. For Lisa, getting timely and accurate information out to taxpayers to help them keep more of their money is paramount. More from Lisa Greene-Lewis Follow Lisa Greene-Lewis on Twitter. 6 responses to “Tax Guide for the Self-Employed: Everything You Need to Know” I am also a part of this field .I am hoping the new blog post from you in upcoming days.Thank you for sharing outstanding information. Reply Lisa or any Turbo Tax Rep: I own an S Corp and am using Turbo Tax Premier for my personal taxes. I can not find where to deduct half of my self-employment taxes? I see the blank on line 27 of my 1040, but cannot find where to enter that number or create the Schedule SE it says to attach. I tried using Home and Business but for an S Corp it said I need to use Premier, but can an S Corp create the Schedule SE in Premier? Reply Hi Jessica, Yes, an S Corp can create the Schedule SE in TurboTax Premier. TurboTax determines what partnership income or guaranteed payments are subject to the self-employment tax when you enter information from your partnership K-1. For information about the K-1, including how to enter it, please follow the link: https://ttlc.intuit.com/questions/1900938 Thanks, Nicolle Reply Home and Business. Yes it has Schedule SE. However, the issue is that the form is not being filled in correctly. I’ve double checked with the local IRS office and it is definitely wrong. TurboTax is not allowing me direct access to that form to make the correction so that I can amend the form. Reply need access to schedule se, turbotax does not provide this access Reply Hi Brent, I’m not sure what TurboTax product you’re in, but TurboTax definitely has schedule SE. Depending on your business you can either use TurboTax Basic or Home and Business. Please see forms available in both products https://turbotax.intuit.com/personal-taxes/online/basic.jsp https://turbotax.intuit.com/personal-taxes/online/home-and-business.jsp Thank you, Lisa Greene-Lewis Reply Leave a Reply Cancel reply Browse Related Articles Work Is Workers’ Compensation Taxable? Self-Employed 1099-MISC, 1099-NEC, or 1099-K: What’s the Difference… Self-Employed Self Employed: Living and Working Abroad? Here’s What… Life Interest Rates Increased to Fight Inflation: What it … Tax Deductions and Credits Are You a PTA Parent? That Volunteering May Just Pay Of… Work So You’re Crossing State Lines? 2022-03-24 Are State Tax Refunds Taxable?