United States Savings Calculator — How Much Could You Save?

Commonly Missed Deductions

• Home office (Form 8829): Deduct the business-use portion of rent/mortgage interest, utilities, insurance, and internet. Alternatively, use the simplified method: $5 per square foot, up to 300 sq ft ($1,500/year). Must be regular and exclusive business use.
• Vehicle expenses: Deduct $0.70 per mile (2025 IRS standard rate) for all business miles driven, or use actual expenses. Keep a mileage log with date, destination, and business purpose. Many self-employed people forget to track this.
• Retirement contributions (SEP-IRA): Contribute up to 25% of net self-employment income (max $70,000 for 2025) to a SEP-IRA. Contributions are fully deductible and reduce both income tax and SE Tax base.
• Self-employed health insurance: 100% of health, dental, and vision insurance premiums are deductible above the line on Form 1040 (not on Schedule C). This reduces AGI and income tax directly.
• QBI deduction (20%): Most self-employed individuals can deduct 20% of their net business income, reducing taxable income significantly. Many miss this deduction or are unsure if they qualify.

OBBBA 2025: New Deduction Opportunities

• 100% Bonus Depreciation restored: The One Big Beautiful Bill Act (2025) restored 100% Bonus Depreciation for equipment purchased after 2025. Buy a $3,000 MacBook? Deduct the full $3,000 on your federal return in year one. Note: California and New Jersey do not conform — your state deduction may differ.
• Section 179 limit increased: The Section 179 expensing limit increased to $2,560,000 for 2026 (federal). This allows immediate full deduction of business equipment without depreciation schedules for most self-employed.
• SALT cap raised to $40,000: The State and Local Tax (SALT) deduction cap increased from $10,000 to $40,000 under OBBBA 2025. If you itemize, this means significantly more state and property taxes are deductible.

Worked Example: Missed Deductions — US Freelancer Earning $75,000

1. Annual income: $75,000 with $10,000 in identified business expenses
2. Estimated missed deductions: $2,400 (home office $900 + mileage $720 + phone portion $480 + software $300)
3. Impact on SE Tax base: $2,400 × 15.3% × 92.35% = $339 additional SE Tax avoided
4. Impact on federal income tax (22% bracket): $2,400 × 22% = $528 income tax saved
5. QBI benefit of additional deductions: $2,400 × 20% × 22% = $106 additional QBI savings
6. Total annual savings from missed deductions: Approximately $973/year

A US freelancer earning $75,000 who misses $2,400 in allowable deductions could overpay the IRS by approximately $973 per year. The most commonly overlooked deductions are home office, vehicle mileage, and phone/internet business-use portions. AI-powered categorisation identifies these automatically from your bank statements.

Frequently Asked Questions

What expenses can US self-employed people claim on Schedule C?

The IRS allows deduction of ordinary and necessary business expenses on Schedule C. Common deductions include: advertising (Line 8), car/truck expenses (Line 9), depreciation (Line 13), insurance (Line 15), legal and professional services (Line 17), office expenses (Line 18), rent/lease (Line 20), repairs (Line 21), supplies (Line 22), utilities/phone (Line 25), meals at 50% (Line 24b), and home office (Form 8829 or $5/sq ft simplified). Business meals are only 50% deductible.

How much could better expense categorisation save me?

It depends on your income level. If you earn $75,000 and miss $2,400 in deductions, at a combined SE Tax + income tax rate of ~37%, you overpay approximately $973/year. Consistent AI-assisted categorisation directly reduces what you owe the IRS.

Do I need receipts for all business expenses in the US?

The IRS generally requires records to support all business expenses claimed on Schedule C. Keep receipts, bank statements, and records for 3 years (or 7 years if the IRS could reasonably suspect substantial under-reporting). For vehicle expenses using the standard mileage rate, you must maintain a contemporaneous mileage log.

What are the Form 1040 self-employed filing deadlines?

Key IRS deadlines for self-employed filers: April 15 — Form 1040 + Schedule C filing deadline; April 15, June 15, September 15, January 15 — quarterly Form 1040-ES estimated tax due dates; October 15 — extended filing deadline (if extension filed by April 15, but any tax owed is still due April 15).