If you’re self-employed, you can deduct ordinary and necessary business expenses—costs you paid to run your business. Deductions lower your taxable income, which can reduce how much you owe in taxes.
You can only deduct the business portion of an expense, and you’ll want to keep records to support what you claim.
What counts as a deductible business expense?
A business expense is generally deductible if it’s:
Ordinary — common in your line of work
Necessary — helpful and appropriate for your business
Expenses don’t have to be required to qualify, but they should clearly relate to your work.
Common business expenses you can deduct
Here are some common deductions for self-employed people and gig workers:
Supplies and equipment
Office supplies
Tools or equipment used for your work
Software or subscriptions needed to run your business
Vehicle and mileage expenses
If you use your car for business—like meeting clients or driving to job sites—you may be able to deduct those miles.
For 2025, the standard mileage rate is 70 cents per mile.
You’ll need to track:
Business miles driven
Dates and purpose of each trip
Personal commuting doesn’t count.
Cell phone expenses
If you use your phone for both work and personal use, you can deduct the business portion of your phone bill.
For example, if about 70% of your phone use is for work, you can deduct roughly 70% of the cost. Keep your bills and notes showing how you calculated the business use.
If you bought a phone specifically for business, you may also be able to deduct the cost of the device.
Home office expenses
If you work from home, you may qualify for the home office deduction if:
You use part of your home regularly and exclusively for business, and
It’s your main place of business
Your deduction can’t exceed your net self-employment income.
There are two ways to calculate this deduction:
Simplified method: Deduct $5 per square foot, up to 300 square feet
Regular method: Deduct a portion of actual expenses like rent, utilities, and repairs
What expenses usually aren’t deductible?
You generally can’t deduct:
Personal expenses
Commuting between home and a regular work location
Expenses that aren’t related to your business
Mixed-use expenses must be split between business and personal use.
Why keeping records matters
You should keep receipts, invoices, mileage logs, and bank statements that support your deductions. Good records make filing easier and help if the IRS ever asks questions.
Key takeaway
If you’re self-employed, deducting business expenses can significantly reduce your taxable income. You can only deduct expenses related to your work, and only the business portion counts.
Keeping clear records throughout the year helps you claim deductions confidently.
This content is provided for informational purposes only and should not be construed as tax, legal, financial, accounting, or other advice. Rules and regulations vary by location and are subject to change, so please consult with an expert if you need advice specific to you.
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