No time of the year is more intimidating than tax time, especially if you’re self-employed. You need to remember all your tax deductions to avoid overpaying taxes, which is a job in itself.
If you track your expenses throughout the year, however, you can save yourself plenty of work when tax season rolls around. Here’s a cheat sheet to the most common expenses you may be able to write off – and some you can’t – when you’re self-employed.
This article is intended to help self-employed individuals with an LLC or a sole proprietorship in California, but some of these write offs may apply to other business entities. Consult with a tax professional if you’re unsure.
With self-employment deductions, there are several categories you can maximize for your deduction. Here are some of the standard deductions:
Contrary to popular belief, you can’t write off just any expense that you have for your business or work. Here are some expenses that aren’t typically deductible:
The best way to maximize your deductions is by tracking your expenses throughout the year and ensuring that you don’t have any errors. Her are some tips to prepare for your tax season:
Expenses are a great way to reduce your taxable income, but many self-employed individuals are too afraid of their taxes to include all their deductions. Prepare for tax time during the year, learn your available deductions, and avoid overpaying on your taxes.
Shahar is a tax and accounting expert with over 20 years of experience in the field. He is an entrepreneur and known as The Tax Guru on the west coast. Shahar moved to Seattle from Israel and founded, scaled, and sold a leading tax and accounting firm in the Seattle Metro area. Over the years, he served thousands of business owners and perfected the playbook for self-employed tax strategy. That’s why he founded Formations, to make sure the self-employed never overpay on taxes again.
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