Income That May Be Taxable:
- Cancellation of debt
- Gains or losses from selling assets
You are considered self-employed if you operate a trade or business as a sole proprietor, independent contractor, or any business for yourself — including part-time.
What You Can Deduct:
Business expenses must be ordinary and necessary for operating or growing your business.
Common deductible expenses include:
- Cost of goods sold
- Raw materials, freight, storage
- Direct labor (sub-contractors)
- Startup costs and capital expenses
- Business assets (vehicles, machinery, improvements)
- Employee wages and benefits
- Rent for space, equipment, or machinery
- Business interest
- Taxes: payroll, sales tax, ad valorem, state/local
- Business insurance (liability, workers’ comp, equipment, employee health)
- Repairs and maintenance
- Legal, accounting, and professional services
- Research and development
- Vehicle expenses (standard mileage or actual expenses)
- Meals (50%; 80% for transportation industry)
- Advertising and marketing
- Charitable contributions related to the business
- Credit card processing fees
- Education related to the business
- Internet and software expenses
- Licenses and permits
- Moving machinery
- Office supplies
- Small tools and equipment
- Telephone
- Office or shop costs, including home office (must be exclusive use)
- Beginning and ending inventory
Quarterly estimate reminders
If you expect to owe $1,000+ for the year, make quarterly payments to avoid penalties. Typical due dates: April 15, June 15, September 15, and January 15 of the following year.
Recordkeeping basics
- Keep receipts (digital is fine) and separate business bank/credit accounts.
- Track mileage with an app; snap photos of odometer at year-end.
- Save invoices and 1099s; reconcile to bank deposits monthly.
If you're unsure whether something counts as income or a deductible expense, call us at 706-677-2700 — we’re always here to help.
Need help with this update?
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