Self-employment status and filing requirements
You’re self-employed if you run a sole proprietorship, work as an independent contractor or freelancer, earn money through gig work, or own a single-member limited liability company treated as a sole proprietorship.
Self-Employed people report business income and expenses on Schedule C (Form 1040) in almost all cases. If your net earnings from self-employment are $400 or more, you’ll typically also use Schedule SE to calculate self-employment taxes, which include Social Security and Medicare taxes.
Since taxes usually aren’t withheld from self-employment income, you may be required to make estimated payments during the year.
Common self-employed tax deductions
Self-employed deductions can appear in different places on your tax return. The table below shows common deductions, what they may cover, and where they’re most commonly claimed.
| Deduction | What it covers | Where it’s claimed |
|---|---|---|
| Advertising | Ads and marketing efforts | Schedule C |
| Business supplies | Software, office supplies, and shipping materials | Schedule C |
| Professional fees | Business-related legal, accounting, payment-processing fees, and more | Schedule C |
| Business insurance | Liability, commercial property, commercial auto, employee health insurance, and more | Schedule C |
| Home office | A space used regularly and exclusively for business | Schedule C, using Form 8829 |
| Vehicle expenses | Business mileage or the business portion of actual vehicle costs | Schedule C |
| Health insurance | Eligible medical, dental, vision, and qualified long-term care premiums | Schedule 1, using Form 7206 |
| Retirement contributions | Eligible contributions to plans such as a SEP IRA or solo 401(k) | Reported separately on your return |
Source: Internal Revenue Service (1,2,3,4)
Home office and vehicle rules
Home office and vehicle deductions have specific eligibility and calculation rules. Here’s what to know:
- Home office: The space must be used regularly and exclusively for business. The simplified method allows $5 per square foot for up to 300 square feet, or a maximum deduction of $1,500. The regular method uses your business-use percentage of eligible home expenses.
- Vehicle expenses: You can deduct actual business costs or use the standard mileage rate. The rate was 70 cents per mile for tax year 2025. For 2026, it’s 72.5 cents per mile from January through June and 76 cents from July through December. You must keep a business mileage log for either method; using the actual expense method requires you also track your total mileage in addition to business mileage.
Pro Tip: Set a reminder to record your odometer reading on January 1 each year, so you can calculate your total mileage more easily.
How to claim self-employed deductions
You’ll report business deductions on Schedule C and calculate self-employment tax on Schedule SE when required. Keep receipts, invoices, and mileage logs to support your expenses.
