Self-Employed Tax Deductions for 2026: The Full List
Self-employed workers can claim several deductions that reduce both self-employment tax and income tax. The most impactful are the automatic 50% SE tax deduction, health insurance premiums, retirement contributions (up to $24,500 in a Solo 401(k)), and business expenses on Schedule C. Here is the complete list for 2026.
50% of self-employment tax
The most straightforward deduction for self-employed workers is the 50% SE tax deduction. You calculate your total SE tax on Schedule SE, then deduct exactly half on Schedule 1, line 15. This is an above-the-line deduction, meaning it reduces your AGI whether you itemize or take the standard deduction.
This deduction exists because W-2 employees do not pay income tax on the employer's share of FICA. Since self-employed workers pay both halves of the 15.3% SE tax, the 50% deduction effectively makes the employer-equivalent half non-taxable for income tax purposes.
Note: this deduction reduces your income tax only. It does not reduce the SE tax itself. You still owe the full SE tax amount.
Self-employed health insurance
Self-employed individuals can deduct 100% of health insurance premiums paid for themselves, their spouse, and their dependents. This includes medical, dental, and vision insurance. The deduction is taken on Schedule 1 (above the line), not on Schedule C.
Requirements for this deduction:
- You must have net self-employment income (the deduction cannot exceed your SE net profit)
- You cannot be eligible for employer-subsidized coverage through your own or a spouse's employer
- The insurance plan must be established under your business
Because this is an above-the-line deduction (not a Schedule C expense), it reduces your income tax but does not reduce your SE tax base.
Retirement contributions
Self-employed workers have access to several retirement account types, each with its own2026 contribution limits:
| Account Type | Contribution Limit | Catch-Up (Age 50+) |
|---|---|---|
| Solo 401(k) (employee deferral) | $24,500 | + $8,000 |
| Solo 401(k) (employer contribution) | Up to 25% of net SE earnings | N/A |
| SEP-IRA | Up to 25% of net SE earnings | N/A |
| Traditional / Roth IRA | $7,500 | + $1,100 |
The Solo 401(k) is often the most powerful option because it allows both an employee deferral (up to $24,500) and an employer contribution (up to 25% of net SE earnings), for a combined maximum that can be significantly higher than other options.
Retirement contributions reduce your taxable income for income tax purposes. They do not reduce your SE tax base (since the SE tax is calculated on Schedule C net profit before retirement deductions).
Home office deduction
If you use a portion of your home regularly and exclusively for business, you can deduct the associated expenses. The IRS offers two methods:
- Simplified method: A prescribed rate per square foot of home office space, with a maximum square footage cap. This method requires minimal recordkeeping.
- Regular method: Calculate actual expenses (rent/mortgage interest, utilities, insurance, repairs) proportional to the percentage of your home used for business. This requires detailed records but may yield a larger deduction.
The home office deduction is a Schedule C expense, which means it reduces both your income tax and your SE tax. This makes it more valuable than above-the-line deductions that only reduce income tax.
Business mileage
If you drive for business purposes (client meetings, job sites, supply runs), you can deduct the business-use portion of your vehicle expenses. The IRS provides two methods:
- Standard mileage rate: A per-mile rate set annually by the IRS. Multiply your business miles by this rate. (The rate changes each year; check the IRS announcement for the current year's rate.)
- Actual expense method: Track all vehicle costs (gas, insurance, maintenance, depreciation) and deduct the business-use percentage.
Commuting from home to a regular workplace does not count as business mileage. However, if your home is your principal place of business (and you qualify for the home office deduction), travel from home to client locations or temporary work sites is deductible.
Other business expenses
All ordinary and necessary business expenses are deductible on Schedule C. Common categories include:
- Office supplies and equipment: Computers, printers, desks, and consumable supplies
- Software and subscriptions: Business software, cloud services, industry publications
- Professional services: Accounting, legal, and consulting fees
- Advertising and marketing: Website hosting, online ads, business cards
- Business insurance: Liability, professional, and errors-and-omissions coverage
- Education and training: Courses and certifications that maintain or improve skills in your current business
- Business meals: 50% of meals with a clear business purpose (meeting with clients, traveling for business)
Schedule C expenses are the most tax-efficient deductions because they reduce both your SE tax base and your taxable income. Every $1,000 of Schedule C expenses saves approximately $141 in SE tax plus additional income tax savings at your marginal rate.
HSA contributions
If you have a high-deductible health plan (HDHP), you can contribute to a Health Savings Account. For 2026, the contribution limits are:
- Self-only coverage: $4,400
- Family coverage: $8,750
HSA contributions are deducted above the line on Schedule 1. Contributions reduce your income tax but not your SE tax. Distributions for qualified medical expenses are tax-free, making the HSA a powerful savings vehicle for self-employed workers who manage their own health coverage.
For a complete SE tax calculation with deductions, use the self-employment tax calculator.