Self employed can have their smile widened as they would be happy to know that too can avail of some tax deductions, which they can plan themselves too. The first thing that would save your money in taxes is if you manage your business from home. It is so easy nowadays to avail of tax deduction to use your home for your business operations.

Your home would prove to be key component in saving you some money under the conditions that:

• Your home is regularly and exclusively used for business or businesses you run.
• You do not manage a considerable part of the business from any other premises.

Note that the exclusive use of home for business means that only the space you use for your office utilities and operations would be considered unless the rest of the room is not being used for other purposes. Once the space for office operations is segregated, it should be compared against the total area of the house and noted down for tax deductions.

When your home becomes your office, you save the travel from your home to office and back to home. That means, your travel becomes deductible, which stood at 0.324 cents per mile in the year 2000. You are not entitled to mention losses in business if you have a home office, but at the same time you can also mention the business income as zero. It decreases the income tax as well as self employment tax. The expenses that you do not claim for a year can be offset for the next year.

If you are covered with a medical insurance for which you pay the premium amount yourself, you can adjust 60 percent of the income on line 28 of Form 1040. The rest 40 percent should be deducted on Schedule A along with the other medical expenses.

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