Self-Employment Deductions

Is there a standard deduction the self-employed can take if they opt not to itemize other deductions?

Dear Janet,

After the birth of our son, my wife, Laurie, decided to open a private speech pathology practice. Laurie travels to people’s homes and really doesn’t have much in the way of deductions. Is there a standard deduction the self-employed can take if they opt not to itemize other deductions?

— Steve Summer, NJ

Dear Steve,

There is no “standard deduction” for the self-employed. But there is an easy way to report self-employment income if she has less than $2,500 in business expenses for the year and meets certain other qualifications. It’s Schedule C-EZ, a simplified version of the Schedule C form for reporting sole proprietorship income and losses. Your wife can use that form for deducting her mileage and other expenses associated with the business. Don’t forget, she’ll also need to file SCHEDULE SE, to pay Self-Employment Tax, if she has net earnings from self-employment of $400 or more.

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