If you started a business in 2019, you probably heard that you wouldn't get many tax breaks because of the 2017 Tax Cuts and Jobs Act. While some self-employment deductions have gone away, some only temporarily, you still have others you can take advantage of when you file your taxes.
As you plan the remainder of your year in anticipation of tax time, it would help you to know what you can and can't do when it comes to filing your taxes.
Common benefits and deductions for the self-employed
Despite the changes in the TCJA, you may have the opportunity to take advantage of the following:
- You can deduct a certain amount of your contributions to a self-employed retirement plan. The IRS does put a maximum limit on your contributions, but the agency raises it each year.
- You take advantage of the home office deductions that include a portion of your rent payments and utilities if you rent. If you own your home, you receive other deductions such as your homeowners' insurance, depreciation and mortgage loan interest, among other things such as your utilities.
- You can also deduct a portion of your phone and internet if you use them for your business. If your business shares these with your home, you may only deduct a portion, but if they are exclusively for your business, you can deduct 100%.
- You may be able to deduct your business-related insurance premiums, along with your qualifying long-term care, dental and health insurance premiums. You can also deduct premiums for your spouse and any children age 27 or under on Dec. 31.
- You can deduct expenses for continuing education needed for your type of business.
- You can deduct business meals when entertaining clients or traveling.
- You might be able to deduct travel expenses if they meet certain criteria.
- If you receive subscriptions or publications specific to your business, you may deduct the cost of them.
- If you use your vehicle for your business, you may receive certain deductions related to its use.
- If you have a business loan, your interest may be deductible.
- You could also deduct up to $5,000 of certain startup costs.
As you can see, you still receive generous tax deductions if you are self-employed. If you question whether a certain expense qualifies for a deduction, you could schedule an appointment with an Illinois tax attorney who can help you get the most out of the deductions available to you.