10 Proven Tax Reduction Strategies for the Self-Employed

If there’s one truth in this world it’s this: taxes can be a headache - especially for business owners. 

Whether this should or shouldn’t be the case (I’m of the very strong opinion that it SHOULDN’T be) is a topic for another time.  

But no doubt about it, it’s easy to feel overwhelmed when searching for strategies to reduce taxes. Especially when you’re self-employed. 

For years I had a variation of this quote taped to my light switch at the office: “My biggest job is to figure out what it is that we DON'T need.”  

A simple Google search proves that point.  One search can yield pages beyond count of articles that contain the words “self-employed” or “self-employment”.    

That’s...a lot. Where in the world do we start?? 

Well, let’s make it easier on ourselves and narrow the playing field with these 10 tips provided by the Bradford Tax Institute (which is our favorite reliable, user-friendly source for info on this subject): 

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. 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% 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% personal vacation. 

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

Any of these ideas look good to you? What are some ways you’ve managed to reduce your taxes?  

** All written content is for information purposes only. Material presented is believed to be from reliable sources. No representations are made by our firm as to another parties’ informational accuracy or completeness.  All information or ideas provided should be discussed in detail with an advisor, accountant or legal counsel prior to implementation. **