10 Game-Changing Year End Tax Tips

Here are some essential year-end tax tips for self-employed individuals to help you maximize deductions, prepare for filing, and stay compliant.

1. Review Income and Expenses

• Reconcile Records: Ensure your income matches 1099 forms and client payments.

• Categorize Expenses: Organize your deductible expenses such as office supplies, utilities, and travel.

• Track Mileage: If you use a vehicle for business, keep an accurate mileage log and calculate your deduction.

  
  

2. Maximize Deductions

• Home Office Deduction: Deduct a portion of your rent, mortgage interest, utilities, or maintenance if you use part of your home exclusively for business.

• Health Insurance Premiums: Self-employed individuals may deduct health insurance premiums for themselves and their families.

• Retirement Contributions: Contribute to a SEP IRA, SIMPLE IRA, or solo 401(k) to reduce taxable income while saving for retirement.

• Donate to Charities: If you make charitable contributions, ensure they are documented. You may be eligible for deductions

  
  

3. Plan for Quarterly Taxes

• Ensure you've made estimated quarterly tax payments for the year to avoid penalties. Use Form 1040-ES to calculate payments if you're unsure.

  
  

4. Consider Accelerating Expenses

• If your income is high this year, consider prepaying some 2025 expenses (e.g., subscriptions, supplies) or deferring income to the next tax year if possible.

  
  

5. Keep Up with New Tax Rules

• Check Deductions and Credits: Confirm any changes to tax laws, such as those affecting business expenses or COVID-related relief measures.

• Qualified Business Income Deduction (QBI): If eligible, you may deduct up to 20% of your qualified business income.

  
  

6. Organize Your Documents

• Gather Receipts: Compile receipts and bank statements related to business expenses.

• Prepare Forms: Ensure all 1099s, invoices, and tax forms are in order.

  
  

7. Invest in Tax-Advantaged Accounts

• HSA Contributions: If you have a high-deductible health plan, contribute to a Health Savings Account (HSA) for tax benefits.

  
  

8. Hire a Professional (If Needed)

• Consult with a tax professional or accountant to help navigate complex deductions, ensure compliance, and reduce your tax liability.

9. Save for Taxes & Prepare Self Employment Tax

• Set aside 25-30% of your income for taxes if you're unsure of your liability. This includes federal income tax, self-employment tax, and any state or local taxes. Self-employment tax is 15.3% of your net earnings, but half can be deducted on your tax return.

10. Review Business Structure

• If your income has grown significantly, consider whether your current business structure (sole proprietor, LLC, etc.) is still the most tax-efficient.