Being self-employed provides one with freedom, flexibility, creativity, contentment, and also the chance to make more money. Being your own boss is definitely a bonus! However, there is one more very important benefit that comes with self-employment, and it’s an unexpected one: more tax savings.
The unexpected benefit of becoming self-employed is business expenses are now tax deductible. This means that when you’re self-employed, you can deduct things like auto expenses and marketing costs, but it also means that other things that could not be written off as an employee can also now be written-off. This includes items such as:
- Professional licenses, association dues, periodical subscriptions: If you work for a professional service company like a law firm, construction company, architect firm, or accounting firm, you may have to pay state and local association or licensing dues. As an employee, these expenses are not deductible on your tax return. But if you are self-employed and operating your own firm, you can fully deduct these expenses.
- Trainings: Self-employment requires you to stay current, up-to-date, and knowledgeable about your industry. The cost of trainings (and associated travel expenses), webinars, and the like are all legitimate business expenses. As long as the training is strictly for business purposes and not extravagant, you can fully deduct these expenses.
- Healthcare: Most self-employed taxpayers can deduct health insurance premiums, including age-based premiums for long-term care coverage. Write-offs are available whether or not you itemize, if you meet the requirements.
- Home Office: If you’re self-employed and work at home, you may be eligible for the home office tax deductions. If you are eligible for home office deductions, the tax savings can be well worth the additional work required to qualify.
No matter what moves you made last year, TurboTax will make them count on your taxes. Whether you want to do your taxes yourself or have a TurboTax expert file for you, we’ll make sure you get every dollar you deserve and your biggest possible refund – guaranteed.