Sometimes what we are most scared of is what we don't know. But, when it comes to deductions, it is important that we know what we can (and cannot) deduct. Sadly, every year, independent contractors lose thousands of dollars by not maximizing their deductions. So, BEFORE tax season hits, I thought it was a good time to share a short list of what you can deduct as an Independent Contract Therapist.
You can choose to deduct either actual car expenses including gas and maintenance or a standard amount for every mile driven for work (often, the better choice). If you lease your car, these expenses can also be deducted.
Health Insurance Premiums and Medical Costs
If you are not eligible under another plan, your health insurance payments and medical costs can all be deducted. Oh, and this includes retirement plans as well!
Home Office Deduction
The percentage of your home dedicated to work plus utilities can be deducted as a business expense.
If you buy supplies or use equipment just for work, these qualify for deductions. This includes supplies like copy paper or therapy supplies for patients as well as computers.
Cell Phone Costs
If you use your phone for business, even if only part time, you can deduct the percentage of costs.
Professional liability insurance coverage will most likely be required by any potential employer for Independent Contract Therapists. The cost to maintain coverage is deductible.
Repairs and Maintenance
Want to repaint your office? Fix a broken computer? Repairs and maintenance of business or office equipment is also a deductible expense (Pinterest here we come!)
Taxes and Licenses
Your small business license/business tax receipt, LLC or incorporation, and even your professional license fees to the State can all be deducted. This also includes your continuing education to maintain licensure.
Legal and Professional Services
Any fees that you pay for legal services, tax preparations or payment to licensed professionals to help with your business can be deducted.
There's more but we'll talk again when we get closer to tax season.
Anything on the list that you did not know?