Web, telephone service, transportation, medical insurance, a house workplace — all these and extra are probably deductible, a minimum of partially, if they’re “odd and essential” components of working your enterprise.
However you may go too far. Chances are you’ll want cell service for the app-based driving or supply work you do, for instance, however you may’t deduct 100% of the fee — solely the portion that’s associated to your gig work. If 25% of your telephone use will be attributed to your gig, then you may deduct 25% of the fee.
The 15.3% self-employment tax talked about above can also be deductible. You’ll be able to deduct half of what you pay in self-employment tax when figuring your earnings taxes.
You can also deduct retirement plan contributions. Whereas it’s typically too late to arrange a solo 401(ok) or a SIMPLE for 2020, you may open and contribute to a SEP IRA till your tax submitting due date: April 15 plus extensions.
You’ll sometimes keep away from underpayment penalties if you find yourself owing the IRS lower than $1,000. You’ll even be penalty-proof in case your 2020 tax funds are a minimum of 90% of what you in the end owe for the 12 months, or 100% of what you paid in 2019, whichever is smaller. (But when your adjusted gross earnings in 2019 was greater than $150,000 — or $75,000 for married submitting a separate return — that threshold rises to 110% of what you paid in 2019.)