Business deductions reduce your taxable income. Here are some common ones to consider:

• Home Office Deduction: If you work from home, you might qualify to deduct expenses for the area you use exclusively & regularly for business. The IRS allows two ways to calculate this home office deduction:

  • The Simplified Method based on the square footage of your office

  • Regular Method based on your actual expenses for your home office

  
  

  For further guidance and official information, visit the IRS Home Office Deduction

  
  

• Vehicle Expenses: If you use your car for business, you can deduct either the actual expenses (gas, maintenance, insurance) or the standard mileage rate set by the IRS. For 2024, the standard mileage rate is $0.67 per mile. Make sure to keep a detailed mileage log.

  
  

  For further guidance and official information, visit the IRS Standard Mileage Rates

  
  

• Business Meals: Meals with clients or those incurred while traveling for business purposes are 50% deductible. Keep your receipts and document the purpose of each meal.

  
  

• Supplies and Equipment: Office supplies, computers, and other necessary equipment for your business are deductible.

Tax credits can help small business owners and self-employed individuals save money by directly reducing the taxes you owe — and some even give you a refund if they’re bigger than your tax bill. The IRS offers several tax credits that could lower your taxes or boost your refund, making them a useful tool for financial planning.

Here are some credits that could significantly lower your tax bill:

• Small Business Health Care Tax Credit: If you provide health insurance for your employees, you may qualify for this credit.

• Work Opportunity Tax Credit (WOTC): If you hire individuals from specific groups who face barriers to employment, you can claim this credit.

• Research and Development Tax Credit: If your business invests in innovation, you might qualify for this valuable credit.

For comprehensive information, visit the IRS's official page on Credits and Deductions for Businesses.

As a self-employed individual, you have access to tax-advantaged retirement accounts, which reduce your taxable income while helping you save for the future. Here are some retirement funds you can check.

• Solo 401(k): Designed for self-employed individuals without employees (except a spouse). You can contribute as both "employee" and "employer," allowing for higher savings. In 2024, the employee deferral limit is $23,000, and the employer contribution can be up to 25% of compensation.

• Simplified Employee Pension Retirement Account (SEP IRA): This plan is straightforward to set up and allows you to contribute up to 25% of your net earnings, up to the maximum limit for 2024.

  
  

For detailed information on retirement funds, visit the IRS's official page here.

Good record-keeping is essential for maximizing deductions and avoiding IRS penalties. Keep track of:

• Income and expense records

• Receipts for business purchases

• Mileage logs for vehicle use

• Any documentation for claimed credits

Having organized records will make tax filing much easier.

While many tax preparation tools are available, hiring a tax professional can ensure you’re claiming all eligible deductions and credits. A professional can also help you with tax planning strategies specific to your business.