Hey {{first_name|there}},
Everyone who goes self-employed usually asks one thing before doing so…
What can I actually write off?
The honest answer is that most of the list has been the same for years, so once you know it, you know it.
Except this year two of the numbers moved.
The mileage rate changed on July 1, and the 1099 threshold changed back in January. If you've been running on last year's figures, you'll want ten minutes with this one.
Let's get into it.
21 tax write-offs, and the two numbers that changed
Most self-employed deductions sit still year to year.
Two of them did not, and one of them moved in the middle of the year, which is quite unusual.
TL;DR:
Business miles were worth 72.5 cents for the first half of the year, and they are worth 76 cents from July onwards. The IRS almost never does this mid-year, and the last time was 2022, so it is easy to miss.
The 1099 threshold moved too, from $600 up to $2,000, which is the first change to that number since 1954. So if you paid a contractor $1,800 this year, you are not required to file a federal 1099 for them.
The home office deduction, meanwhile, is exactly where it was. Five dollars a square foot, up to 300 square feet, so $1,500 at the very top.
Two rates, one year
Here is what the split actually costs you if you get it wrong.
Say you drove 10,000 business miles this year, split either side of July evenly.
Run it at one flat rate, and you are off by a couple of hundred dollars in one direction or the other.
Run it properly, and it looks like this.
The 2026 Mileage Split
Period | Rate per mile | 5000 miles |
Jan 1 to Jun 30, 2026 | 72.5¢ | $3,625 |
Jul 1 to Dec 31, 2026 | 76¢ | $3,800 |
Total for the year | $7,425 |
The increase isn't retroactive, so the higher rate won't affect your January trips.
Regardless of the rate, parking and tolls during a business trip are separate and can be added on top.
Remember, your daily commute doesn't count, which often surprises people, because driving to your regular workplace is considered personal, even if you're the boss.
When it comes to mixed-use items like your phone bill, internet, car, or home, the rule is straightforward: claim the business portion and be ready to explain how you calculated it.
If you estimate that 70% of your internet usage is for work, that's perfectly fine, as long as it's roughly accurate and you can justify it.
A few of the specifics people get wrong.
A course counts if it sharpens something you already do, and does not if it qualifies you for a new line of work, so a photography workshop is deductible for a photographer and not for a bookkeeper.
Business meals are half deductible when there is a client across the table, but the golf afterwards is not deductible at all.
And clothing only counts if you could not reasonably wear it anywhere else, which rules out the nice shirt you bought for client meetings.
01. The new $2,000 threshold does not mean you can stop chasing W-9s. If a contractor you have paid $1,800 picks up one more job in December and crosses the line, you will need their details to file, and without them you are supposed to start withholding at 24%. Collect the form at the start like you always did. |
02. The QBI deduction has a floor now. If you have at least $1,000 of qualified business income from a business you actually work in, you are guaranteed at least $400. It is not a large number, but it is a new one, and the deduction itself is permanent now rather than expiring. |
03. Half your self-employment tax is deductible, which people forget because it feels like it should not be. Owe $2,000 and $1,000 comes off your income. Worth knowing that it lowers your income tax and not the self-employment tax you just paid. |
The thing they mostly have in common is that they are easy to claim if you wrote something down at the time, and painful to reconstruct in April from a year of bank statements.
The guide has all of them, including the ones that look deductible and are not.
One note: We are not a CPA firm or a tax advisory service. We make it easy to create pay stubs, invoices, W-2s and 1099s. For anything specific to your situation, talk to your accountant.
See you next week.
Russ & — The PayStubsNow team