Tax Deductions You Might Be Missing as an Independent Contractor

Tax Deductions You Might Be Missing as an Independent Contractor

Maximize Your Tax Deductions as an Independent Contractor

As an independent contractor, every dollar counts, and maximizing your tax deductions can significantly reduce your taxable income. Are you missing out on valuable deductions? Many independent contractors do—simply because they don’t know what’s deductible. Here are some commonly overlooked tax deductions that could save you money.

1. Home Office Deduction

If you use a portion of your home exclusively for business, you may qualify for the home office deduction. Choose between:

✅ Simplified method —$5 per square foot, up to 300 sq. ft.

✅ Actual expense method — Based on rent, utilities, and maintenance.

Not sure which method is best for you? Read our complete guide on the home office deduction to maximize your tax savings.

2. Vehicle Expenses & Mileage

If you use your vehicle for business, you can deduct:

✅ Mileage — Track business miles using a mileage app.

✅ Actual expenses — Includes gas, maintenance, insurance, and depreciation (if using the actual expense method).

3. Internet & Phone Bills

If you use your personal phone and internet for business, you can deduct the business portion of these expenses. Keep records of how much is used for work.

4. Health Insurance Premiums

If you’re self-employed and pay for your own health insurance, you may be eligible to deduct health, dental, and long-term care insurance premiums for yourself, your spouse, and dependents.

5. Professional Development & Subscriptions

Investing in your skills and industry knowledge can be deducted, including:

✅ Online courses and certifications

✅ Business books and trade publications

✅ Professional association memberships

6. Advertising & Marketing Costs

Money spent on advertising and growing your business is fully deductible, including:

✅ Website hosting & domain fees

✅ Social media ads & sponsored content

✅ Business cards, flyers, and promotional materials

7. Software & Business Tools

Do you use tools like QuickBooks, Adobe Suite, or project management apps? These are deductible business expenses.

8. Self-Employment Taxes

As an independent contractor, you’re responsible for self-employment tax (15.3%), which covers Social Security and Medicare. However, you can deduct 50% of this tax when calculating your taxable income.

Final Thoughts

Every dollar saved is a dollar earned! Let KB2 Bookkeeping & Tax help you track expenses and maximize deductions, so you keep more of your hard-earned money. Contact us today to make sure you’re claiming every deduction you deserve!