If you work for yourself — whether you run a business, freelance, drive for Uber or DoorDash, or do contract work — you are leaving money on the table if you don’t know about these deductions. Self-employed people pay more taxes than traditional employees because they cover both the employer and employee portions of Social Security and Medicare taxes. But the tax code also gives self-employed workers some powerful deductions to offset that burden.

Here are 5 tax deductions that self-employed people miss every year — and how to claim them for 2026.

1. Self-Employment Tax Deduction

When you work for yourself, you pay the full 15.3% self-employment tax (12.4% for Social Security + 2.9% for Medicare). Employees only pay half — their employer covers the rest. But here’s what most people miss: the IRS lets you deduct the employer-equivalent portion (7.65%) of your self-employment tax from your gross income. This is an “above-the-line” deduction, meaning you get it even if you don’t itemize.

This deduction is calculated on Schedule SE and then transferred to Schedule 1 of your Form 1040. If your net self-employment income is $80,000, that’s roughly $6,120 you can deduct right off the top.

2. Home Office Deduction

If you use part of your home regularly and exclusively for business, you can deduct a portion of your housing expenses. The IRS offers two methods:

• Simplified method — $5 per square foot of your home office, up to 300 square feet. Maximum deduction: $1,500.
• Regular method — Calculate the actual percentage of your home used for business and deduct that percentage of rent, mortgage interest, utilities, insurance, repairs, and depreciation.

The key requirement is “regular and exclusive use.” Your home office can’t double as a guest bedroom. It has to be a dedicated workspace. Many self-employed people skip this deduction because they think it triggers audits — that’s a myth. Just make sure you qualify and keep records.

3. Health Insurance Premiums

Self-employed people who pay for their own health insurance can deduct 100% of the premiums for themselves, their spouse, and their dependents. This includes medical, dental, and qualifying long-term care insurance. This is another above-the-line deduction — you don’t need to itemize to claim it.

The catch: you can’t claim this deduction if you were eligible for employer-sponsored health insurance through a spouse’s job or another employer during any month of the year. You can only deduct premiums for the months you were not eligible for other coverage.

4. Vehicle and Mileage Expenses

If you use your car for business — meeting clients, driving to job sites, picking up supplies, or any work-related travel — you can deduct vehicle expenses. You have two options:

• Standard mileage rate — For 2026, the IRS standard mileage rate is 70 cents per mile for business use. If you drive 15,000 business miles, that’s a $10,500 deduction.
• Actual expense method — Track all vehicle costs (gas, insurance, repairs, depreciation, registration) and deduct the business-use percentage.

The most important thing: keep a mileage log. Write down the date, destination, purpose of the trip, and miles driven. Without documentation, you lose this deduction in an audit. Use a mileage tracking app to make it easy.

Note: commuting from home to a regular office does NOT count as business mileage. But if your home is your principal place of business, trips from home to client locations do count.

5. Retirement Contributions (SEP IRA or Solo 401k)

This is the deduction most self-employed people completely overlook. If you don’t have a retirement plan set up for your business, you’re missing one of the biggest tax shelters available.

• SEP IRA — You can contribute up to 25% of your net self-employment income, up to $70,000 for 2026. Easy to set up, no employee matching requirements.
• Solo 401(k) — If you have no employees (other than a spouse), you can contribute as both employer and employee. The employee portion allows up to $23,500 in 2026, plus the employer match of up to 25% of compensation.

These contributions are fully tax-deductible. If you make $100,000 in net self-employment income and contribute $25,000 to a SEP IRA, your taxable income drops to $75,000. That’s real money saved on your tax bill while building your retirement.

Bonus: Other Commonly Missed Deductions

• Business insurance — liability insurance, professional insurance, errors and omissions
• Professional development — courses, certifications, books, and conferences related to your business
• Software and subscriptions — accounting software, design tools, cloud storage, website hosting
• Phone and internet — the business-use percentage of your cell phone and internet bills
• Advertising and marketing — business cards, website costs, social media ads, flyers

Don’t Leave Money on the Table

Self-employed taxes are complicated, but they don’t have to be stressful. A good tax professional will find deductions you didn’t know existed and make sure you’re paying the IRS only what you owe — not a dollar more.

JRICKSS Financial Services specializes in helping self-employed workers, freelancers, and small business owners in New Jersey file their taxes and maximize their deductions. Book a free consultation at jrickssfinancialservices.com/book or call us today.