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New Member
posted Jun 6, 2019 8:11:42 AM

I'm self employed, rent where I live, and work from home. What can I deduct?

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4 Replies
Level 2
Jun 6, 2019 8:11:44 AM

You may deduct expenses including proportionate rent and utilities for a room in your apartment providing you use that room exclusively for business.  If you use the room for other purposes - say watching TV with the family - or else other family members use that room for purposes unrelated to your business than you may not deduct it as a business expense.  The key is that the room must be used solely and exclusively for purposes of conducting your business.  If such is truly the case then you may deduct a percentage of the rent, insurance, electricity, etc which would pertain to that room.  Same, if you hire a cleaning lady to clean your apartment or an exterminator to regularly spray your apartment to prevent insect infestations.  The percentage would be based on the square footage of that room in comparison to the square footage of the apartment, as a whole.  If your entire apartment was say 850 square feet and you use a room therein which measures 10 x 12 exclusively for business, then you would deduct 120/850 or approximately 14% of your apartment expenses as business expenses.  If your children play in the room or your spouse watches TV in the room, then you may not deduct anything because, in that case, the room is not used exclusively for purposes of conducting your business.

New Member
Jun 6, 2019 8:11:46 AM

Plus supplies for business, separate phone line, your costs for health insurance, medical bills, advertising costs, licenses or fees you pay, travel expenses, mileage....maybe Google it "tax write-offs for the self employed "

Level 2
Jun 6, 2019 8:11:47 AM

Momwith6kids is quite correct.  I want to emphasize a point she made - namely the that health insurance premiums (including medicare and "Medigap" premiums) are  deductible.  This expense can be quite substantive and the premiums are fully deductible for the business owner as well as what he or she pays  to cover the spouse.  Most responsible persons purchase health insurance no matter what meaning - whether or not they were in business for themselves or whether or not it was deductible, they would consider it a necessary and unavoidable expense.  So the bottom line is that if one is self-employed, the sum total of the yearly premiums for health insurance - which is typically quite a lot of money - is essentially tax-free income.

New Member
Jun 6, 2019 8:11:49 AM

One more thing I thought of...if you put money in an iRA and haven't really made much at your business yet, there's some place on the form that will ask you if  you provide for your own retirement and they'll calculate it as tax-free income.