![]() ![]() See the IRS’s home-office deduction factsheet (opens in new tab) and Publication 587 Business Use of Your Home (opens in new tab) for more information. Independent contractors can deduct the cost of a home office if they use part of their home regularly and exclusively for a freelance business. Half of the Social Security and Medicare taxes you pay is also deductible. You can also deduct legal and professional fees for your business, books and publications you purchase for your business, and the cost to rent an office space (or you may qualify for the home-office deduction if you work regularly and exclusively in your home). The good news for you as an independent contractor is that you can deduct many of your business expenses - such as the cost of a computer, printer and other equipment you use in your work, plus the cost of work-related phone calls and mailings, office supplies, duplicating, advertising and business travel. If your net earnings are more than $400, you’ll also need to file Schedule SE (opens in new tab) to figure your Social Security and Medicare taxes. You may be able to use the shorter Schedule C-EZ (opens in new tab) if your business expenses do not exceed $5,000, you have no employees and you don’t claim a home-office deduction (see below). ![]() You’ll need to report that income on a Schedule C (opens in new tab) accompanying your tax return. Answer: You should receive a Form 1099-MISC from your old employer by the end of January reporting your self-employed income for 2016. ![]()
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