1. Home Office Deduction
If you have a space at home that you regularly use exclusively for work, you may qualify for the home office deduction. Under the Simplified Method, you can deduct $5 per square foot, up to $1,500. Under the Regular Method, you can deduct a proportional share of actual expenses, including rent, mortgage interest, insurance, utilities, and repairs.
Health Insurance Premium Deduction
Eligible self-employed individuals may deduct some premiums paid for themselves and their families as an adjustment to income. The full amount may not be deductible depending on your business net profit, access to an employer-sponsored plan, and long-term care insurance limits.
3. Retirement Contributions
You may be able to deduct contributions to self-employed retirement accounts such as a Solo 401(k), SEP-IRA, or SIMPLE IRA. In 2026, Solo 401(k) contributions can total up to $72,000, combining employee contributions of up to $24,500 ($32,500 if you are age 50 or older) with employer contributions. SEP-IRA contributions can be up to 25% of net earnings.
4. Business Expenses
You may deduct software, computers, office supplies, phone bills, internet costs, and other expenses necessary for your work. This also includes advertising and marketing, website hosting, professional services such as accounting and legal fees, bank fees, and business insurance premiums. Keep your receipts and clearly document the business purpose of each expense.
Vehicle and Travel Records
For 2026, the standard business mileage rate is 72.5 cents per mile from January 1 through June 30 and 76 cents per mile from July 1 onward. Because there are rules governing the choice between the standard mileage and actual expense methods, record the date, distance, and purpose of each trip and exclude personal travel. Business travel and meals are also subject to purpose and deduction limits.