The workers who forgo the yoke of traditional employment to strike it out on their own form a vibrant sector of the American economy. From ambitious entrepreneurs to cunning freelancers and everyone in between, self-employed workers say "no" to a punch-the-clock world and enjoy a great deal of freedom in their work. However, that freedom comes at a price—namely, the onerous self-employment taxes one must pay when they aren't a W-2 employee. When tax time comes around, the self-employed seek out relief. Fortunately, the IRS allows for deductions and strategies that can take some of the sting out of those tax rates. The best tax breaks for the self-employed allow workers to take honest deductions that won't burn them in the long run. Here are a few to consider.

The Home Office

home office


In 2020, millions of Americans acquainted themselves with webcams, broadband connectivity tests, and lagging video calls as they packed up their offices and started to work from home. Tantalized by visions of tax deductions for home offices, W-2-bound employees were chagrined to discover that this deduction was no longer available in the pandemic. Self-employed people, on the other hand, continue to enjoy deduction opportunities for home office expenses as long as they maintain dedicated square footage for exclusive and extensive work use. This deduction can help take a bite out of your utilities and mortgage.

SEP IRA

SEP IRA


If you're self-employed but also have employees of your own, investing in your retirement and theirs can provide a significant tax break. Simplified Employee Pension plans allow employers to make contributions for themselves with matching contributions on behalf of their employees, making this an ideal plan for very small businesses. In fact, you can even establish an SEP as a sole proprietorship with no other employees at all. Unlike a 401(k) plan, contributions from an SEP go into traditional IRAs. As pre-tax contributions, they represent a sizable tax break in the short term, which can be quite useful for a small business.

Continuing Education

continuing education tax break


The road to self-improvement can prove costly when it involves the American educational system. The expenses for continuing education can be especially burdensome for self-employed workers. Luckily, the IRS allows for deductions relating to tuition and ancillary costs. Like all the best tax breaks for the self-employed, however, Uncle Sam does maintain some rigorous standards for what qualifies—the lessons you learn and the credentials you earn must pertain to your existing work.

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Over two years into the most momentous event in our lives the world has changed forever … Some of us have PTSD from being locked up at home, some are living like everything’s going to end tomorrow, and the rest of us are merely trying to get by. When the pandemic hit we entered a perpetual state of vulnerability, but now we’re supposed to return to normal and just get on with our lives.

What does that mean? Packed bars, concerts, and grocery shopping without a mask feel totally strange. We got used to having more rules over our everyday life, considering if we really had to go out or keeping Zooming from our living rooms in threadbare pajama bottoms.

The work-from-home culture changed it all. Initially, companies were skeptical about letting employees work remotely, automatically assuming work output would fall and so would the quality. To the contrary, since March of 2020 productivity has risen by 47%, which says it all. Employees can work from home and still deliver results.

There are a number of reasons why everyone loves the work from home culture. We gained hours weekly that were wasted on public transport, people saved a ton of money, and could work from anywhere in the world. Then there were the obvious reasons like wearing sweats or loungewear all week long and having your pets close by. Come on, whose cat hasn’t done a tap dance on your keyboard in the middle of that All Hands Call!

Working from home grants the freedom to decorate your ‘office’ any way you want. But then people needed a change of environment. Companies began requesting their employees' RTO, thus generating the Hybrid Work Model — a blend of in-person and virtual work arrangements. Prior to 2020, about 20% of employees worked from home, but in the midst of the pandemic, it exploded to around 70%.

Although the number of people working from home increased and people enjoyed their flexibility, politicians started calling for a harder RTW policy. President Joe Biden urges us with, “It’s time for Americans to get back to work and fill our great downtowns again.”

While Boris Johnson said, “Mother Nature does not like working from home.'' It wasn’t surprising that politicians wanted people back at their desks due to the financial impact of working from the office. According to a report in the BBC, US workers spent between $2,000 - $5,000 each year on transport to work before the pandemic.

That’s where the problem lies. The majority of us stopped planning for public transport, takeaway coffee, and fresh work-appropriate outfits. We must reconsider these things now, and our wallets are paying

the price. Gas costs are at an all-time high, making public transport increase their fees; food and clothes are all on a steep incline. A simple iced latte from Dunkin’ went from $3.70 to $3.99 (which doesn’t seem like much but 2-3 coffees a day with the extra flavors and shots add up to a lot), while sandwiches soared by 14% and salads by 11%.

This contributes to the pressure employees feel about heading into the office. Remote work may have begun as a safety measure, but it’s now a savings measure for employees around the world.

Bloomberg are offering its US staff a $75 daily commuting stipend that they can spend however they want. And other companies are doing the best they can. This still lends credence to ‘the great resignation.’ Initially starting with the retail, food service, and hospitality sectors which were hard hit during the pandemic, it has since spread to other industries. By September 2021, the US Bureau of Labor Statistics reported 4.4 million resignations.

That’s where the most critical question lies…work from home, work from the office or stick to this new hybrid world culture?

Borris Johnson thinks, “We need to get back into the habit of getting into the office.” Because his experience of working from home “is you spend an awful lot of time making another cup of coffee and then, you know, getting up, walking very slowly to the fridge, hacking off a small piece of cheese, then walking very slowly back to your laptop and then forgetting what it was you’re doing.”

While New York City Mayor Eric Adams says you “can't stay home in your pajamas all day."

In the end, does it really matter where we work if efficiency and productivity are great? We’ve proven that companies can trust us to achieve the same results — or better! — and on time with this hybrid model. Employees can be more flexible, which boosts satisfaction, improves both productivity and retention, and improves diversity in the workplace because corporations can hire through the US and indeed all over the world.

We’ve seen companies make this work in many ways, through virtual lunches, breakout rooms, paint and prosecco parties, and — the most popular — trivia nights.

As much as we strive for normalcy, the last two years cannot simply be erased. So instead of wiping out this era, it's time to embrace the change and find the right world culture for you.

What would get you into the office? Free lunch? A gym membership? Permission to hang out with your dog? Some employers are trying just that.

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Did you hear about the Great Resignation? It isn’t over. Just over two years of pandemic living, many offices are finally returning to full-time or hybrid experiences. This is causing employees to totally reconsider their positions.

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