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April 7, 2022
Question

Would if be more beneficial to use standard deduction for self-employed if I do not have enough deductions?

  • April 7, 2022
  • 2 replies
  • 0 views
I was self-employed...I can only deduct certtain expenses which do not come anywhere near standard deduction amount.  Why can'
t I use Standard deduction instead of itemizing.

2 replies

DoninGA
April 7, 2022

You enter your business income and expenses on Schedule C.  The business expenses are not entered on Schedule A as a personal itemized deduction.

 

The Standard Deduction is used for all taxpayers unless their Total itemized deductions on Schedule A are greater than the Standard Deduction for their filing status.

 

Standard deductions for 2021

  • Single - $12,550 add $1,700 if age 65 or older
  • Married Filing Separately - $12,550 add $1,350 if age 65 or older
  • Married Filing Jointly - $25,100 add $1,350 for each spouse age 65 or older
  • Head of Household - $18,800 add $1,700 if age 65 or older
VolvoGirl
April 7, 2022

Don't confuse itemized deductions on schedule A with your business expenses/deductions on schedule C. They are separate. For Schedule A personal deductions, you get to take your itemized deductions or the standard deduction, whichever is larger.  Itemized deductions are things like Medical, Gifts to Charity, State Income Taxes Paid, Mortgage Interest, Property Taxes, Car Registration fees, etc.

 

You get to take both,  your business expenses AND the Standard Deduction (or your personal Itemized Deductions).  And you have to enter your business expenses.  Be aware, if you have self employment income you can get in trouble for not reporting all your expenses to qualify for the EIC.