If you are self employed and pay for your own health insurance, you may be able to deduct the cost of the premiums. While this is substantial, you are able to take an adjustment for ½ of the tax on Schedule 1. It covers Social Security and Medicare, and the rate is 15.3%, with 12.4% going for Social Security and 2.9% for Medicare. In addition to income tax, there is a separate tax self-employed people must pay called the self-employment tax. 'You need to maintain a record of your internet/phone expenses, and then deduct based on the percentage used exclusively for business purposes.' 3. 'There's an overarching calculation that can be used when looking to deduct internet and phone expenses related to business use of internet/phone,' says Richmond. If you use either service for both work and personal use, you should only deduct the portion associated with your business. You have the option to deduct internet and phone bills incurred while conducting business, such as while working from your home office. Show Pros, Cons, and More chevron down icon An icon in the shape of an angle pointing down. As usual, you should keep receipts of anything you want to deduct. It also includes more expensive items such as computers and printers (these are capital assets that are not deducted as supplies but rather depreciated). This deduction is separate from the home office deduction and includes things like pens, staples, etc. You can deduct office supplies you use as part of your business. Try both options to see which leads to a larger deduction. Quick tip: While the simplified option is easier, it caps at $1,500. You calculate the deduction by completing Form 8829 to itemize these expenses, which makes keeping receipts very important, says Richmond. If you opt for the regular method, there are many types of expenses you can deduct, including physical objects such as furniture and appliances as well as utilities, insurance,maintenance and repairs. Regular method: This method uses the actual expenses you incur. While it's a relatively easy way to account for such expenses, keep in mind that the 300 square-foot limit results in a maximum deduction of $1,500, says Ben Richmond, chartered accountant and US country manager (US) at accounting-software provider Xero. Simplified method: This method uses a standard deduction of $5 per square foot of home used for business, up to a maximum of 300 square feet. There are two methods of deducting home office expenses: The home office deduction allows you to deduct any portion of your home that you use regularly and exclusively for work.

Here are some of the most common deductions that can help you reduce your taxable income and maximize your profits.

Understanding the basics of what expenses you can deduct is important whether you decide to file a return on your own or hire an advisor to help guide you through it. Having to report your own business income and expenses adds another layer of complication. From long hours to variable income, self-employment can be a tough way to make a living.

Self employed tax write offs