When you work for yourself, the tax code gives back some of what self-employment tax takes. The catch: nobody hands you these write-offs — you have to know them and document them. Here are the self-employed tax deductions freelancers and contractors most often miss, in plain English.
First, how self-employment tax works
As an employee, you and your employer split Social Security and Medicare taxes. When you’re self-employed, you pay both halves — that’s self-employment tax, 15.3% of your net business earnings (12.4% for Social Security up to a yearly wage base, plus 2.9% for Medicare on everything). The good news: you automatically deduct half of that SE tax as an adjustment to income, before you even get to the deductions below.
The home office deduction
If you use part of your home regularly and exclusively for business, you can deduct it — whether you rent or own. Two methods:
- Simplified: a flat rate per square foot of office space, up to a cap.
- Regular: the business percentage of your actual home costs (rent/mortgage interest, utilities, insurance).
Run both and take the larger; the simplified method is far less paperwork.
Vehicle and mileage
Driving for work? Deduct it two ways:
- Standard mileage rate — multiply business miles by the IRS rate (the IRS updates this rate each year). Simple, and usually generous.
- Actual expenses — the business share of gas, maintenance, insurance, and depreciation.
Either way, log your business miles — date, destination, purpose. Commuting to a regular workplace doesn’t count.
Self-employed health insurance
If you pay for your own health insurance and aren’t eligible for a spouse’s employer plan, you can generally deduct your premiums (medical, dental, and qualifying long-term care) as an adjustment to income — a valuable write-off many freelancers overlook.
Retirement contributions
Saving for retirement lowers this year’s taxable income too. Self-employed options let you contribute far more than a standard IRA:
- SEP-IRA — simple to set up; contribute a percentage of net earnings.
- Solo 401(k) — lets you contribute as both “employee” and “employer,” often allowing the largest contribution.
Everyday business expenses
These add up fast and are easy to forget:
- Software, apps, and subscriptions you use for work
- Supplies and equipment
- A reasonable share of your phone and internet
- Professional services (accountant, legal), education, and business insurance
- Marketing, website, and platform/processing fees
The rule of thumb: an expense must be ordinary and necessary for your business.
Don’t forget quarterly estimated taxes
Because no employer is withholding tax for you, the IRS expects you to pay as you go.
Keep records like it’s an audit
A deduction you can’t prove is a deduction you can lose. Keep receipts, a mileage log, and a clean separation between business and personal spending (a dedicated business account helps). Good tax software — see our best tax software for the self-employed — can track much of this for you.
The bottom line
The self-employed pay more in payroll-style tax, but the deductions above — home office, mileage, health insurance, retirement, and everyday business costs — claw a lot of it back. Track everything, pay your quarterlies, and claim what you’re entitled to. This is educational information, not tax advice; a CPA or enrolled agent can confirm what applies to your situation. New to filing? Start with How to File Taxes for the First Time or browse our Taxes guides.
Frequently asked questions
What can I write off as a self-employed person?
How does self-employment tax work?
Do I have to pay taxes quarterly if I'm self-employed?
Can I deduct my home office if I rent?
Sources
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