Self-employed tax deductions that actually cut your bill
Every dollar you deduct is a dollar you aren't taxed on — and the self-employed have more deductions than almost anyone. Here are the ones that move the needle for 2026, from the automatic adjustments to the write-offs people forget.
- ✓Half your self-employment tax and the 20% QBI deduction are automatic — don't miss them.
- ✓A home office, health premiums, and retirement contributions are the big elective ones.
- ✓Lowering net profit cuts both income tax and self-employment tax.
The automatic deductions
Two big ones happen without extra paperwork. You deduct half of your base self-employment tax against income tax, and the 20% QBI deduction takes a fifth of your business profit off your taxable income. On top of that, everyone gets the standard deduction ($16,100 single / $32,200 married filing jointly for 2026). The calculator applies all three by default.
Retirement contributions
A SEP-IRA or Solo 401(k) lets you move a large share of profit into retirement and deduct it from this year's income tax — often the single biggest lever a profitable freelancer has. It lowers income tax, not self-employment tax. (See the SEP-IRA vs Solo 401(k) guide for the 2026 limits and which to pick.)
Self-employed health insurance
If you pay your own health, dental, or qualifying long-term-care premiums, you can generally deduct them above the line — reducing income tax up to the limit of your business profit. It's easy to overlook because it isn't a business expense on Schedule C; it's a separate adjustment.
The home office deduction
Use part of your home regularly and exclusively for business and you can deduct it. The simplified method is $5 per square foot up to 300 sq ft (a flat $1,500 max); the actual-expense method prorates rent, utilities, and insurance by the share of your home you use. Pick whichever is larger.
Ordinary business expenses
Anything ordinary and necessary for your work lowers your net profit — software, a laptop, professional fees, business mileage, supplies, a portion of your phone and internet. Because net profit is the base for both income tax and self-employment tax, every legitimate expense saves you on both. Keep records; don't deduct personal costs or your commute.
Frequently asked questions
Half your SE tax and the 20% QBI deduction (automatic), retirement contributions, self-employed health premiums, a home office, and any ordinary, necessary business expense — software, equipment, professional fees, business mileage, and more.
Related calculators & guides
A planning estimate, not tax advice. Figures use IRS Rev. Proc. 2025-32 (2026). Confirm decisions with real money on the line with a CPA or enrolled agent.