Recent Posts:Don’t leave these self-employed tax deductions on the tableIf you’re self-employed, every legitimate tax deduction matters. Yet many business owners leave money on the table simply because they aren’t aware of all the expenses they can deduct or aren’t sure what qualifies. Whether you’re a sole proprietor, freelancer, consultant, contractor, or side hustler, here’s a straightforward overview of how business deductions work and five commonly overlooked deductions that could help lower your tax bill. The Basics: Reporting Self-Employment IncomeSelf-employed individuals generally report their business activity on Schedule C, “Profit or Loss From Business,” which is filed with their personal tax return (Form 1040). Your business income includes money earned from:
You may receive forms such as a 1099-NEC or 1099-K reporting some of your income, but you’re still required to report all taxable business income, even if you don’t receive a tax form. One major advantage of being self-employed is that you can deduct qualifying business expenses. Unlike employees, who generally can no longer deduct unreimbursed job-related expenses, self-employed individuals can use eligible deductions to reduce their taxable business income. The Golden Rule for Business DeductionsTo be deductible, an expense generally must be:
Good recordkeeping is essential. Save receipts, invoices, mileage logs, and other documentation to support your deductions. While the general rule sounds simple, determining whether an expense qualifies as “ordinary and necessary” isn’t always straightforward. At Padgett, we regularly help small business owners identify deductions they may have overlooked while ensuring they remain compliant with IRS requirements Here are five examples. 1. Home Office ExpensesIf you use part of your home regularly and exclusively for business, you may qualify for the home office deduction. This is different from simply working remotely. The space must be dedicated to your business and serve as your principal place of business. If you qualify, you may be able to deduct a portion of expenses such as:
For example, if 10% of your apartment’s square footage is used exclusively for business, you may be able to deduct 10% of your rent and certain other home-related expenses. You can also fully deduct direct expenses related to the office itself, such as painting or repairs made only to that space. Homeowners may also be eligible to claim depreciation on the business-use portion of their home. Prefer a simpler approach? The IRS offers a simplified method that allows a deduction of $5 per square foot for up to 300 square feet of office space. 2. Continuing Education and TrainingInvesting in your professional skills may also provide a tax benefit. You may be able to deduct costs associated with:
Qualifying expenses can include tuition, books, supplies, fees, and in some cases, travel costs associated with attending the program. However, there is an important limitation: education that qualifies you for a new profession or helps you meet the minimum requirements of a profession generally isn’t deductible. For example, the cost of obtaining an undergraduate degree generally cannot be deducted as a business expense. 3. Business MealsBusiness meals remain deductible in many situations. Generally, you can deduct 50% of the cost of meals purchased for business purposes, provided the expenses aren’t considered lavish or extravagant. This can include meals with:
Entertainment expenses themselves are generally not deductible, but food and beverages purchased during an entertainment event may still qualify if they’re separately identified on the receipt. For example, if you take a customer to a World Cup match this summer, the ticket costs aren’t deductible. However, if you purchase popcorn, nachos, and drinks during the event, you can generally deduct 50% of those food and beverage costs as long as:
4. Business TravelTravel expenses can often be deducted when the primary purpose of the trip is business. Deductible expenses may include:
For example, if you travel to another city to attend a trade show or professional conference, many of those costs may qualify. If your trip combines business and personal activities, only the business portion is deductible. Let’s say you travel for four days of business meetings and then stay an additional three days for vacation. In that case:
When it comes to transportation costs such as airfare, the rules are slightly different. If the trip is primarily for business, the airfare can generally be deducted in full. If the trip is primarily personal, none of the travel costs are deductible. If your spouse travels with you, their expenses usually aren’t deductible unless they are an employee of your business and have a legitimate business reason for being there. That said, if their presence doesn’t increase certain costs, those expenses may still be fully deductible. For example, the cost of a hotel room or driving your vehicle may remain the same whether one person or two people are traveling. 5. Vehicle ExpensesIf you use your personal vehicle for business, you may be eligible to deduct a portion of your vehicle expenses. The deduction is based on the percentage of business use. For example, if you use your vehicle 60% of the time for business in 2026, you may be able to deduct 60% of expenses such as:
You may also qualify for depreciation deductions, subject to certain limitations for luxury vehicles. If you purchase a vehicle in 2026, additional tax benefits may be available through Section 179 expensing and 100% bonus depreciation, provided eligibility requirements are met. Documentation is critical. The IRS expects taxpayers to maintain a contemporaneous mileage log that records business trips and related expenses. Alternatively, many business owners choose the standard mileage method, which allows a deduction of 72.5 cents per business mile in 2026, plus business-related tolls and parking fees. Vehicle deductions can be especially valuable, but choosing between actual expenses and the standard mileage method isn’t always a clear-cut decision. A Padgett advisor can help you determine which approach provides the greatest tax benefit for your situation. Don’t Leave Tax Savings on the TableMany self-employed business owners miss out on legitimate deductions because they misunderstand the rules or fail to keep adequate records throughout the year. Maintaining organized records can:
Every business is different, which means the deductions available to you may look very different from those available to another business owner. A Padgett office close to you can help you identify opportunities to reduce your tax liability, maintain proper documentation, and develop a tax strategy tailored to your business goals. The post Don’t leave these self-employed tax deductions on the table appeared first on Padgett. 06/18/2026
Kevin Garibaldi found the recipe for success with PadgettThroughout his varied career, making good food has been a constant for Kevin Garibaldi, owner of Garibaldi’s Catering and its companion restaurant, Garibaldi’s New Orleans Cuisine. Kevin began his career with a restaurant apprenticeship in Monterey, California. He was trained by chefs of the Monterey Bay Chefs’ Association in the 1980s at the Sardine Factory and The Rogue. At the time, he didn’t plan on becoming a business owner. In fact, after working his way up from pantry man, prep cook and finally to chef, Kevin decided to pursue a degree in political science, planning for a career change to law. “I was so tired of cooking, and I felt like I wanted to go back to school,” Kevin says. “So, I then quit my job and went full-time in college, thinking I wanted to be a lawyer.” But after working as a paralegal, Kevin felt unsatisfied, and changed careers again. “One of my professors told me I would be an outstanding teacher,” he says, “so I went back to get my credential in social science. I taught world history, geography and economics in high school for eight years.” When teaching history, Kevin liked to use food as a tool to help his students learn about other places and cultures. “It was like, we’re talking about Saudi Arabia today, and this is what they eat. Or if we’re talking about Russia, here’s what the Russian people eat. It’s the hook. That’s what gets the kids interested.” By the time he retired from teaching, Kevin was already catering 10 weddings a year, just based on word-of-mouth advertising. At that point, he decided to seek funding for his business and opened Garibaldi’s Catering.
Through word-of-mouth, TV commercials, and biannual visits to a local bridal show, Kevin’s business was catering 25 weddings a year — until COVID-19 hit. “I looked around at our community, and we had Thai restaurants and Mexican and Italian and so on,” he says. “So, I opened up Garibaldi’s New Orleans Cuisine with my mom’s recipes.” After adding restaurant ownership to his plate, Kevin’s Padgett partnership became even more important. “I was a small business and having trouble handling payroll employees,” he says. “It was a pain to try and keep track of everybody’s hours and benefits. When we opened the restaurant, it became even more work to handle payroll, so that’s when I turned to Piper and John. They’ve been doing my payroll and deposits, and they take care of it for me.” As well as assisting with Kevin’s payroll and taxes, Piper and John of Padgett Business Services Chico helped him take advantage of the Employee Retention Credit (ERC) and other benefits. “They give me a lot of business advice,” Kevin says, “and during COVID, they helped me find support when I didn’t have a lot of business. John has been amazing at helping me find things that I didn’t even know were offered. I got a lot of money in 2020 because of John. He’s my man. He helped me through the business while I was teaching and my wife was a nurse, so he helped me learn how to grow as my business grew.” Now, business has picked back up, and Kevin’s reputation has grown as a local favorite. He’s found support from community members, the North Valley Community Foundation, and even Green Bay Packers quarterback Aaron Rodgers. “We’re hanging in there because of local community help, and I love what I’m doing and cooking for people with my mama’s cooking,” Kevin says. Giving back to the community that supported him is important to Kevin, so he often supports local high schools and college scholarship funds. When he’s not helping out at the restaurant, catering lunches three times a week, or working as a “celebrity chef” with the local Salvation Army, he likes to teach jiu jitsu, work in his garden and travel with his family.
“One of the lessons I learned is that you’ve got to try and take some time and sit down and meditate and recharge,” he says. “Some people think they’ll start a business and just get to kick back but really you’ve got to work. You get what you put into it. But you’re not here to work yourself to death. You work hard, but you’ve got to take time to enjoy it once in a while too. It’s okay to ask for help from someone who knows what they’re talking about, and it’s okay to take a break sometimes.” Having a partner who can help take care of his payroll and taxes helps Kevin find the time to take his well-earned breaks. “I think that you’ve got to find someone you trust, like I trust Piper and John and Padgett Business Services. They’re not just people who help me out with my business, but they’re friends. I’m a chef and I want to cook, and I hated all the paperwork. If you can afford it — and I think it’s pretty affordable — I think it’s good to get someone else to handle your paperwork and you just enjoy what you’re doing.” Whether you own a restaurant like Kevin, or you run another kind of business, Padgett has the experience to help you succeed. Find your local office today! This entry was posted in Accounting, Meet Padgett, Payroll, Success Stories, Tax by Padgett Advisors. Bookmark the permalink. 02/23/2022
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