You can also take a Section 179 election to fully expense and deduct the asset in the current year - instead of depreciating it - to further reduce your tax liability. You will be able to classify this as an asset and take a $57.14 depreciation expense deduction each year over a useful life of seven years, which is standard for office furniture. If you purchase equipment, such as a laptop or a leaf blower for your business, you can categorize it as an asset and take a depreciation deduction - which allows you to spread the expense over the useful life of your asset.įor example, let’s say you purchased a new ergonomic office chair at the beginning of the year for $400. For example, if 20% of your time on the phone is spent on business, you could deduct 20% of your phone bill. You also can deduct communication expenses, such as a portion of your internet and cellphone bill, as long as those costs are directly related to your business.
Other common deductible expenses related to your home office include website services, computer software, merchant fees, electronics and other supplies needed to run your business. Medical Expenses Retirees (and Others) Can Deduct on Their Taxes Or you can use the actual expense deduction method, which allows you to write off a percentage of expenses related to rent, utilities, mortgage interest, property taxes and repairs and maintenance. A home office deduction can be calculated using the simplified deduction method, which is a prescribed rate of $5 per square foot of your home that is used for business up to 300 square feet. Home office expenses is another deduction that you can take advantage of if you utilize part of your home as your office space to conduct business. This allows you to recover some costs associated with wear and tear on your vehicle to operate your business.īe sure to keep track of your business miles, personal miles and commuting miles as you will need to provide this information to take the deduction. If your self-employed income is from operating a ride-hailing or delivery business through platforms such as Uber or Lyft, you will be able to take a vehicle expense deduction. Here are four easy ways to keep your taxes down if you are self-employed.
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