Tax deductions for freelancers?
First you need to be sure that you are not an employee and are really self-employed. If the company sends you a 1099 instead of a W2, then you are self-employed. If so, then you can deduct 100% of health insurance premiums for yourself and family. It doesn’t matter whether you pay premiums through COBRA or your union. Your deduction cannot be larger than the net profit from your business. This deduction goes on line 29 of your Form 1040. You can deduct any expenses that are directly related to your business. For example technical books, magazine subscriptions and professional dues. It is important that you claim as many legal deductions as possible on your schedule C because you will pay about 15% off the top of your net profit for social security taxes before you even get to your income tax. You can also set up your own retirement plan such as a SEP IRA as a replacement for the 401(k) plan that an employer would provide. You can deduct up to 20% of your income and put it in a SEP IRA,
