by Janet Attard
Is there a standard deduction the self-employed can take if they opt not to itemize other deductions?
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
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.
About the author:
Janet Attard is the founder of the award-winning Business Know-How small business web site and information resource. Janet is also the author of The Home Office And Small Business Answer Book and of Business Know-How: An Operational Guide For Home-Based and Micro-Sized Businesses with Limited Budgets. Follow Janet on Twitter at http://www.twitter.com/JanetAttard.