Oak Brook Tax - 7 big tax breaks for the self-employed
Strategy: Don't be so quick to change. There are plenty of benefits to sticking with the simplest setup. Under current tax law, some self-employed individuals are entitled to tax breaks comparable to, or even better than, incorporated small business owners. Here are seven prime examples.
Self-Employment Tax Deduction - Deduct the employer-equivalent portion (7.65%) of your self-employment tax
SEP-IRA Contributions - Contribute up to 25% of net self-employment income, up to $69,000 in 2025
Solo 401(k) - Make both employee and employer contributions, potentially exceeding SEP-IRA limits
Health Insurance Deduction - Deduct 100% of health insurance premiums for yourself and your family
Home Office Deduction - Deduct expenses for the portion of your home used exclusively for business
Qualified Business Income (QBI) Deduction - Deduct up to 20% of qualified business income
Business Expense Deductions - Deduct all ordinary and necessary business expenses
These tax breaks can result in significant savings. Make sure you're taking advantage of all that apply to your situation.
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