9 Self-Employed Tax Deductions You May Be Overlooking

As an independent professional, managing expenses goes far beyond basic bookkeeping. It plays a direct role in protecting your income, planning for the future, and keeping your business financially healthy. When you operate as a business-of-one, many costs fall squarely on your shoulders—costs that employees often never see. Healthcare and retirement savings, technology, and professional development are just a few examples.

Some expenses remain fixed month after month, while others fluctuate based on workload or client needs. Left unchecked, these costs can quietly eat into earnings. The good news is that thoughtful expense tracking and smart use of tax deductions can help offset many of these obligations. At tax time, those deductions can translate into meaningful savings—and, when managed well throughout the year, stronger cash flow overall.

What are the tax deductions independent professionals should consider?

Independent professionals can reduce taxable income by taking advantage of deductions tied directly to running their business. Below are key tax deductions to consider, assuming each expense is ordinary, necessary, and properly documented.

1. Retirement Plans

Retirement savings represent one of the most valuable tax advantages available to self-employed individuals. Unlike traditional employees, independent professionals must take full responsibility for funding their own retirement. Fortunately, several tax-advantaged plans exist to support that goal.

An individual 401(k) works well for solo professionals with no employees. This plan offers the ability to contribute both as an employee and an employer, significantly increasing contribution limits. For 2024, contributions reached up to $24,500, with an additional $8,000 catch-up contribution for those age 50 or older.

A Savings Incentive Match Plan for Employees (SIMPLE) IRA suits independent professionals who employ others. This option supports employee participation while offering predictable employer contribution requirements.

A Simplified Employee Pension (SEP) IRA provides flexibility for professionals with higher earnings. Contributions can reach up to 25% of income, with an annual cap that changes each year.

Beyond tax savings, retirement plans support long-term financial stability. Contributions reduce taxable income today while building future security.

2. Phone and Internet Expenses

Reliable connectivity remains essential for most independent businesses. Phone service, internet access, and even fax services qualify as deductible expenses when used for business purposes.

When devices serve both personal and professional needs, deductions must reflect the business-use percentage. For example, if 60% of your phone usage supports client work, 60% of the monthly bill qualifies as a business expense.

Clear documentation matters. Usage estimates should remain reasonable and consistent, and itemized statements or usage summaries help support deductions if questions arise.

3. Education Expenses

Staying current within your field often requires ongoing learning. Education expenses directly tied to maintaining or improving job-related skills generally qualify as deductible.

Eligible expenses may include:

• Online courses and training programs
• Certification programs
• Tuition for industry-related classes
• Conferences and seminars
• Professional books and subscriptions

Courses that qualify you for an entirely new profession typically do not count. Keep detailed records, including digital receipts, course descriptions, and payment confirmations.

Professional development strengthens expertise while reducing taxable income—a practical combination for long-term success.

4. Insurance Premiums

Health coverage remains one of the most significant expenses for independent professionals. In many cases, medical, dental, and long-term care insurance premiums qualify as deductions.

Eligibility depends on access to employer-sponsored plans. If coverage is available through a spouse’s employer—even if not selected—this deduction generally does not apply.

Premiums for dependents often qualify as well, provided other requirements are met. Because insurance deductions can be complex, professional guidance helps ensure accurate reporting.

5. Marketing and Advertising Spend

Building visibility and attracting new clients requires consistent marketing investment. Many common marketing expenses qualify as deductible business costs.

Examples include:

• Website design and hosting
• Online advertising
• Business cards and branded materials
• Public relations or marketing consultants
• Email marketing tools

The key factor is intent. Expenses should directly support promoting your services or growing your client base. Personal branding activities unrelated to business goals typically fall outside deductible boundaries.

6. Meals

Business meals remain deductible when they serve a clear professional purpose. Taking a client, prospect, or business partner out for a meal to discuss work-related matters generally qualifies.

The deduction currently covers up to 50% of eligible meal expenses. The meal should not be extravagant, and documentation matters. Keep receipts and note who attended, the business purpose, and the date and location. Meals consumed alone while working generally do not qualify unless travel-related.

7. Legal and Professional Fees

Independent professionals often rely on expert support to keep their business running smoothly. Fees paid for professional services connected to business operations typically qualify as deductions.

Examples include:

• Tax preparation and accounting services
• Legal consultations
• Association or membership dues
• Business coaching or consulting

Personal services unrelated to business activity do not qualify, even if provided by the same professional. Clear separation between business and personal expenses simplifies recordkeeping and reduces confusion.

Check Out: The Support Team Every Independent Professional Needs

8. Auto-Related Expenses

Transportation often plays a role in client meetings, project work, and professional travel. When using a personal vehicle for business purposes, related costs may qualify for deductions.

Two calculation methods exist:

• Standard mileage rate, which assigns a per-mile deduction
• Actual expense method, based on fuel, maintenance, insurance, and depreciation

Consistent recordkeeping remains essential. Maintain a log that tracks mileage, dates, destinations, and business purpose. Without documentation, deductions may be difficult to support.

9. Travel Expenses

Travel expenses qualify as deductions when business activity represents the primary purpose of the trip. Eligible costs may include airfare, lodging, transportation, and certain meals.

A business meeting, conference, or client engagement should occur during the trip to justify deductions. Combining personal travel with business requires careful allocation—only the business-related portion qualifies.

Documentation should reflect the purpose of your trip, the dates of your trip, and any business activities conducted. Clear records help avoid complications during tax filing.

More Tools and Resources for Independent Contractors and Self-Employed Professionals

If you’re looking for more support to grow your small business, explore the MBO Partners blog for expert tips and strategies tailored to independent professionals and small business owners. You’ll find practical advice and insights to help you take the next step in your independent journey, from building a sustainable pipeline of work to leveling up your skills and navigating today’s changing world of work.

You can also browse the latest consulting opportunities by visiting MBO Partners’ page for independent professionals., where you can search projects with leading brands and get your profile in front of hiring managers looking for skilled independent talent.

The information provided in the MBO Blog does not constitute legal, tax or financial advice. It does not take into account your particular circumstances, objectives, legal and financial situation or needs.  Before acting on any information in the MBO Blog you should consider the appropriateness of the information for your situation in consultation with a professional advisor of your choosing.