Smart Tax Moves for the Self-Employed: 24 Tips from Haynie

03 Sep 2025 Smart Tax Moves for the Self-Employed: 24 Tips from Haynie

Running your own business comes with a unique set of challenges and a powerful set of opportunities when it comes to taxes. As trusted advisors, we see firsthand how self-employed professionals can make strategic decisions that reduce tax burdens, improve cash flow, and support long-term financial goals.

Whether you’re a consultant, creative, medical professional, or entrepreneur scaling your side hustle, here are 24 ways to keep more of what you earn:

Tax Planning Basics

1. Make Estimated Payments:
Self-employed individuals typically need to make quarterly tax payments to stay compliant and avoid penalties.

2. Understand Your Entity Type:
Your business structure (sole prop, LLC, S-corp, etc.) significantly impacts how your income is taxed. It’s worth reviewing annually.

3. Save with an S-Corp:
High earners with low expenses may benefit from an S-Corp election, where you pay yourself a reasonable salary and save on self-employment tax for the rest.

Deduct Smart, Save More

4. Maximize Your Home Office Deduction:
If you regularly and exclusively use part of your home for business, you may qualify for significant deductions, either through a simplified method or actual expense tracking.

5. Don’t Forget Business Use of Your Car:
Track mileage or deduct vehicle-related expenses. Apps make it easy, and in many cases, the mileage method provides a larger benefit.

6. Leverage Equipment Deductions:
You can fully deduct qualifying purchases under $2,500 the year you buy them, such as laptops, phones, or software.

7. Deduct Tax Prep Fees:
Costs related to business tax preparation are deductible, another reason to work with a knowledgeable professional.

8. Take the Self-Employment Tax Deduction:
While you’re paying both the employer and employee portion of Social Security and Medicare, the IRS allows you to deduct half.

Plan for the Future

9. Fund a Retirement Plan:
SEP-IRA, solo 401(k), and SIMPLE IRAs have pros and cons. You may be able to defer more than you think.

10. Explore Defined-Benefit Plans:
These plans allow for high-dollar tax-deductible contributions, particularly beneficial for late-career professionals with steady income.

11. Use Roth Conversions Strategically:
During low-income years or after selling a business, converting to Roth can create future tax-free growth.

12. Tap into Retirement Tax Credits:
Small business owners may qualify for Secure 2.0 Act credits, up to $1,000 per employee, for setting up retirement plans.

Health, Family & Lifestyle

13. Deduct Health Insurance Premiums:
You can deduct premiums for yourself, your spouse, and dependents, including dental and long-term care.

14. Hire Your Kids:
If they’re doing legitimate work, this reduces your taxable income while allowing them to earn and save.

15. Consider the Augusta Rule:
Rent your home to your business for up to 14 days annually and deduct the expense tax-free on the personal side.

16. Support for Passions Outside Work:
Flexibility doesn’t just boost work-life balance, it can also lead to tax benefits for travel, equipment, and education related to your business.

Advanced Strategies

17. Navigate the QBI Deduction:
Up to 20% of qualified business income may be deductible, but this comes with thresholds and caveats. Know where you stand.

18. Evaluate State Tax Strategies:
Some states allow pass-through entities to pay taxes at the business level to avoid the SALT cap. This is worth considering if you’re in a high-tax state.

19. Know When to Pivot from Solo 401(k):
If you plan to grow and hire, you may need to transition to a new plan structure. Be sure to plan ahead.

20. Consider Goodwill vs. Equipment in Sales:
Selling a business? Strategic allocation of purchase price impacts your tax treatment significantly.

Hidden Wins

21. Track Business Miles Accurately:
The logbook matters. A few extra deductions can add up.

22. Think Charitably:
Qualified charitable distributions, especially from retirement accounts, can reduce taxable income.

23. Use Loans Intentionally:
Structured right, loans can create liquidity without triggering taxes, especially during a sale or transition.

24. Don’t DIY Entity Selection:
Choosing the wrong structure can cost you. Schedule a visit with your CPA and legal team to get it right.

At Haynie, we believe smart planning today leads to a stronger financial future. If you’re self-employed or considering starting your own business, our trusted advisors are here to help you make confident, informed decisions.

Ready to simplify your self-employment taxes?

Schedule a consultation with Haynie. Let us help you plan smarter, save more, and grow with confidence.