Tax Deductions for Self-Employed Individuals

Self-employed individuals also have additional retirement account options which can add up to big tax savings. A SEP-IRA for example (assuming the individual meets certain criteria) can allow a self-employed individual to save over $50,000 annually to a retirement account and 100% of this contribution is tax deductible.

Besides this self-employed tax deduction, individuals working from home who have a space set aside somewhere within the home, may have additional tax deductions as well like these three examples:

Utilities and Services

If your line of work requires an Internet and phone connection, then you may be able to recover a portion of your annual expenses for these services. The best way to do this is to keep all receipts from your Internet and phone provider throughout the year; at the end of the year, total up your annual expenses and determine what percentage of those expenses were business related. This may be anywhere from a few percent to all depending on your specific situation.


This can save you a lot of money but you must also be very careful with it. If you have a specific room in your home that is dedicated to work, then you may be able to write off the cost of that portion of your rent or mortgage in addition to the utilities required to service it. If you plan on taking this, it is important that you measure the square footage of this space and prorate the amount based off of the footage. If it is a shared space, you must determine what percentage of time is used for work and prorate based off that percentage.

Moving Expenses

You can’t always deduct moving costs when it comes to taxes, but if your move was related to a job relocation, you may be able to claim a tax deduction. If a new job drove you to relocate to a new city, you can claim a tax deduction as long as the new job is more than 50 miles farther from your old house than the distance of your previous commute. If the distance between your old home and old job was 10 miles, the distance between your old home and the new job must be at least 60 miles to meet the 50-mile distance test. Additionally, the relocation must be completed within one year from the date you first reported to the new job unless there are reasonable reasons for the delay, such as waiting for a child to complete high school. Only expenses that are not reimbursed by your employer can be reported as deductions. After the move, you must remain with the job on a full-time basis for at least 39 weeks to qualify for this tax deduction.

When a move is job related, other moving expenses may be considered tax deductions. Keep track of the money spent on packing and shipping expenses, including boxes, tape and bubble wrap. Moving and packing company fees can also be deducted. The costs associated with moving pets or vehicles qualify for deduction, as do travel and accommodation costs. If you’re driving, keep receipts when you fill up with gas, or simply claim the standard mileage rate. Recent graduates may also be able to use student loan interest and moving expenses to take a job.

One of the biggest hassles when moving is disconnecting and reconnecting utilities. Fees for these services can be included on a tax return. However, fees related to buying and selling of the home do not qualify.

These are just a few of the deductions that filers and self-employed individuals may sometimes miss. These can save you serious money this tax season, so remember to save those receipts and we'll work with you to get you deduction we can.

You can find more information on other tax deductions here.

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