IRS Self Employed Tax Deductions & Write Offs 2011, 2012

The IRS has detailed rules for self employed persons’ tax deductions and write offs.

The phrase “write off” is widely used to mean any deduction that a self employed person can claim on their taxes. Deductions include payroll, cars, travel, office expenses – including home office expenses – depreciation, professional services, interest paid, etc. Even some taxes are included.

“Losses” from the sale of an asset, are generally thought of more specifically as “Write offs”. This phrase is popular when referring to bad investments made by a wealthy taxpayer that reduce the amount of taxes he or she owes. There are many legitimate losses, however, that are taken every year. These can be for casualty losses in a place of business, the sale of a boat, car or building – the sale of stock, bonds, etc., - even the sale of a business itself.

If you are setting up a new business as a self employed person, it is wise to create a good accounting system and to maintain and frequently refer to a checklist of deductions and write offs for which you may be eligible. You can potentially save thousands of dollars when you file your return later. It may also mean the difference between having a large tax bill and a tax refund when you do file.

For the self employed, TurboTax Online offers valuable tips and information for claiming business expenses and valuable self employed tax deductions.