Business Use of Your Home

If you use a portion of your home exclusively and regularly for business, you may qualify for a home office deduction. This deduction is based on the percentage of your home used for business activities and can include:

• Mortgage Interest: Deduct the portion of interest that corresponds to the business use of your home.

• Homeowners Insurance: Claim a percentage of your insurance costs based on your home office’s size.

• Rent: If you rent your home, you can deduct a portion of your rent based on the business-use percentage.

• Utilities: Deduct a portion of your utilities, including electricity, heating, and water, proportional to the space used for your business.

Business Use of Your Car

When your vehicle is used for business purposes, you can deduct:

• Car Loan Interest: Deduct the business portion of interest on your car loan.

• Parking Fees and Tolls: Deduct the cost of parking fees and tolls incurred during business travel.

• Mileage: As of 2024, the standard mileage rate set by the IRS for business use of a vehicle is 65.5 cents per mile. This rate is used to calculate the deductible costs for business miles driven. Be sure to keep detailed records of your mileage to ensure accurate deductions.
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Continuing Professional Education (CPE) and License Fees

If you incur costs for professional development or renewing your license, you can deduct:

• CPE Credits: Claim deductions for continuing education required to maintain your professional license.

• License Renewal Fees: Deduct fees related to maintaining or renewing your professional license.

Business Meals and Entertainment

You can deduct up to 50% of the cost of business-related meals and entertainment expenses. This includes meals with clients or business partners where business discussions take place.

Medical and Dental Insurance Premiums

If you pay for medical and dental insurance for yourself, these premiums can be deducted from your taxable income.

Business Equipment, Computers, and Office Furniture

For equipment and furniture purchased or financed after 2017, you can generally deduct the full cost in the year it was bought. This includes:
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• Computers and Related Equipment

• Office Furniture: Desks, chairs, and other office furnishings.

Legal and Professional Services

Fees paid for professional services such as:
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• Legal Services: Lawyers or legal advisors.

• Accounting Services: Bookkeepers and accountants.

Tax Preparation Costs

You can deduct a portion of the cost of tax preparation that is directly related to your self-employment activities. This includes fees for preparing Schedule C.

Self-Employment Tax

You can deduct half of your self-employment tax, which is the portion of your income that goes toward Social Security and Medicare taxes.

Interest on Business Loans

Interest paid on loans used for business purposes is deductible. This includes loans for equipment, supplies, or operational expenses.

Section 179 Deduction for Software

If you purchased software between January 1, 2003, and December 31, 2014, you may be eligible for a Section 179 deduction, which allows you to deduct the full cost of the software.

Transaction Fees from Payment Processors

Fees charged by payment processors for handling transactions can also be deducted as a business expense.
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