Self-employment Tax Deductions

If you're self-employed, you could qualify for additional income tax deductions. If you work out of your home, there are even more opportunities to claim your expenses. Here are a few examples:

• Deduct half of your self-employment tax.
• The Section 179 Deduction generally allows you to write off up to $250,000 of business property other than real estate purchased in 2008. Higher limits may apply.
• If you use a part of your home exclusively and regularly for business, you can deduct the business portion of rent, mortgage interest, real estate taxes, utilities, insurance and repairs.
• You can establish a retirement plan that may allow you to make contributions that exceed the amount you can contribute to a traditional IRA or Roth IRA. This deduction is not allowed for self-employment tax purposes.