# 6 Tax Deductions Side Hustlers Miss

> Six deductions side hustlers leave on the table every year, from the home office to retirement savings.

Canonical: https://christianbrinkleync.com/guides/tax-deductions-side-hustlers-miss

## Quick answer

Side hustlers routinely miss the home office deduction, mileage, the business share of phone and internet, self-employed health insurance, retirement contributions, and ordinary supplies. Each one lowers your taxable profit. Tracking them as you go is easier than reconstructing them in April.

## Mistake 1: Skipping the home office simplified method

If you work from a dedicated space at home, the simplified method is built for you. It lets you deduct $5 per square foot up to $1,500 with no receipts to track. Many people skip it because they assume the regular method is too much paperwork. The simplified option takes about a minute on the tax return.

## Mistake 2: Not logging mileage

Business miles you drive for your side hustle are deductible at the IRS standard rate, but only if you have a log. A phone app that records trips automatically is enough. Commuting from home to a regular job does not count, but driving to clients, suppliers, and gigs does.

## Mistake 3: Forgetting the business share of phone and internet

If you use your phone and home internet for the side hustle, the business percentage is deductible. Estimate it honestly, such as 40% if the side hustle drives that share of use. You cannot deduct the whole bill, but the real portion is money back.

## Mistake 4: Missing self-employed health insurance

Self-employed people can deduct health insurance premiums for themselves, their spouse, and dependents as an adjustment to income. You do not need to itemize to get it. If the side hustle is your only self-employment income, the deduction is limited to your net profit from it.

## Mistake 5: Skipping retirement contributions

A SEP IRA or Solo 401(k) lets you shelter side-hustle profit and cut this year's tax bill. Contributions for a Solo 401(k) can be large relative to the income, which makes it powerful even for modest gigs. The deduction lands on top of your other business write-offs.

## Mistake 6: Ignoring software and supplies

Subscriptions, apps, shipping, packaging, and small tools used for the business are fully deductible ordinary expenses. People forget them because each one feels too small to matter. Together they often add up to hundreds of dollars a year.

## Missed side-hustle deductions and how to claim each

| Topic | How they compare |
| --- | --- |
| Skipping the home office | Use the $5 per square foot simplified method |
| Not logging mileage | Run an automatic mileage tracker |
| Forgetting phone and internet | Deduct the honest business percentage |
| Missing health insurance | Claim the self-employed premium adjustment |
| Skipping retirement contributions | Open a SEP IRA or Solo 401(k) |
| Ignoring software and supplies | Track every subscription and supply |

## Checklist

- [ ] Measure your home office and claim the simplified deduction.
- [ ] Start an automatic mileage log before your next business trip.
- [ ] Estimate the business share of your phone and internet bills.
- [ ] Price out a SEP IRA or Solo 401(k) for this year's profit.

## Frequently asked questions

### Do I need to itemize to claim side-hustle deductions?

No. Business deductions go on Schedule C against your business income, completely separate from itemizing. The self-employed health insurance deduction is an adjustment to income, so it helps even if you take the standard deduction.

### Can I deduct my home office if I also have a regular job?

Yes, if the space is used regularly and exclusively for the side business. Having a W-2 job does not disqualify you. The simplified method needs no receipts, just the square footage up to 300 square feet.

## Sources

- [IRS: Small Business and Self-Employed Tax Center](https://www.irs.gov/businesses/small-businesses-self-employed)
- [IRS: Filing](https://www.irs.gov/filing)

## Related

- [Side hustle taxes, plain English](https://christianbrinkleync.com/wealth/side-hustle-taxes)
- [Tax brackets explained plainly](https://christianbrinkleync.com/wealth/tax-brackets-explained-plainly)
- [What to do if you cannot pay your taxes](https://christianbrinkleync.com/guides/tax-extension-cannot-pay)

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Educational content only, not financial or tax advice. Published by Christian Brinkley, christianbrinkleync.com.