10 Proven Tax Reduction Strategies for the Self-Employed

You can feel overwhelmed when you search our archive library for strategies that apply to the self-employed.

For example, a search today will yield more than 263 strategy articles with the words “self-employed” or “self-employment.” That’s a lot.

Where do you start?

As you likely know already, we create checklists to help you. And we have done just that with our new sole proprietorship checklist titled “10 Proven Strategies to Lower Your Schedule C Taxes.”

Now, instead of feeling overwhelmed by the more than 263 possible strategies, you can start with the 10 below:

1. Use the Section 105 plan to make your health insurance a tax-favored business deduction on your Schedule C.

2. Employ your under-age-18 child to make taxable income disappear.

3. Employ your spouse without paying him or her a W-2 wage.

4. Rent your office, even your home office, from your spouse to save self-employment taxes.

5. Establish that an office in your home is your principal office to increase (yes, increase!) your vehicle deductions and also turn personal home expenses into business expenses.

6. Give yourself flowers, fruit, and books as tax-deductible fringe benefits.

7. Combine the home office and a heavy SUV, crossover vehicle, or pickup truck to grab big deductions this year.

8. Design a business trip that includes some personal days—days you treat as 100 percent business even though you don’t work on those days.

9. Use the seven-day tax deduction travel rule to create a business trip that is 87 percent personal vacation.

10. Deduct your smartphone and provide smartphones to your employees as tax-free fringe benefits.

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