Business Tax Deduction Calculator
Calculate tax deductions for self-employed individuals and small business owners. Estimate savings from common business expenses, retirement contributions, and the QBI deduction.
Business Information
Operating Expenses
Standard mileage rate: $0.67/mile (2024). Calculator uses whichever is higher.
Only 50% deductible for business meals
Other Deductible Expenses
SEP-IRA: up to 25% of net income ($69,000 max). Solo 401k: $23,000 + 25% of net income.
100% deductible for self-employed (deducted from gross income, not SE tax)
Home Office Deduction
Deduction Summary
Operating Expenses:$43000
Professional Services:$6000.00
Salaries:$40000.00
Retirement:$23000.00
Health Insurance:$12000.00
Home Office:$0.00
Total Deductions
$132000.00
Reducing gross income of $150000.00 to net income of $18000.00
Tax Calculation
Self-Employment Tax:$2543.32
SE Tax Deduction:$1271.66
QBI Deduction:$3600.00
Income Tax:$0.00
Total Tax & Savings
$2543.32
Total Tax Owed
1.70%
Effective Rate
Key Deduction Rules
- Ordinary & Necessary: Expenses must be common, accepted, and helpful for your business.
- Meals: 50% deductible. Must be business-related, not lavish.
- Vehicle: Standard mileage ($0.67/mile) OR actual expenses (gas, repairs, depreciation).
- Home Office: Simplified ($5/sq ft, max $1,500) OR regular method (actual expenses prorated).
- Health Insurance: 100% deductible for self-employed. Reduces income tax, not SE tax.
- Retirement: SEP-IRA up to 25% of net SE income ($69K). Solo 401k: $23K + 25% employer contribution.
- QBI Deduction: 20% of qualified business income for pass-through entities (LLC, S-Corp, sole prop).
- SE Tax Deduction: Deduct 50% of SE tax from gross income.