Self-employed? Here’s How to Save on Taxes with Mileage Deductions
Let’s learn about some of them, including the all-important business mileage deduction, which at $0.70 mile (in 2025), can easily save you thousands.
How taxes work when you’re self-employed
For many people, self-employment is a path to flexibility and freedom. It is also incredibly expensive. For one, you’re responsible for sourcing, purchasing, and maintaining all your equipment and tools. Then there’s the taxes.
Unlike employees, who have taxes automatically withheld from their paychecks, self-employed individuals are responsible for calculating and paying estimated taxes each quarter (Q1: April 15, Q2: June 15, Q3: September 15, and Q4: January 15 of next year).
The total amount you pay per quarter is counts toward a few different types of tax:
• Self-employment tax: You pay both the employer and employee portions of Social Security and Medicare taxes — a total of 15.3% on your net earnings.
• Federal income tax: The total percentage will vary based on your income bracket for the current tax year.
• Any state or local income tax: Check with your state and local tax agency for income tax brackets and payment dates (these often follow the IRS by may differ).
Saving on taxes when you work for yourself
You probably heard the term “tax write-off” — this refers to writing off business expenses when filing your tax return. Self-employed people can use these “write-offs” or tax deductions to lower how much money they owe to the government.
What kind of business expenses can be written of
It’s easy to feel like anything you purchase for your business can be written off, but in fact the IRS does have a pretty exacting “ordinary and necessary” rule.
You can only write off business expenses that are needed and common in your industry.
The lesson here is to be smart and strategic about your small business tax deductions.
Here are some of the most common deductions for contractors and self-employed:
• Business mileage
• Home office deduction
• Airfare & accommodations for business travel
• Website domain and hosting fees
• Tools like bookkeeping software, customer management, or project management platforms
Of course, your list may include many other additional expenses, but these are the most universally applicable to self-employed people.
Why mileage deductions are the best way to save on taxes
No. You’ll get 1099s after the year is over, but as a self-employed person you need to pay quarterly taxes. This means you’ll need to estimate how much you’ll make and pay a portion of your tax every quarter.
What kinds of deductions can I get?
It depends on your industry, but some of the most common deductions include:
- Work mileage
- Travel expenses (accommodations and airfare)
- Home office (square footage)
- Training expenses (seminars, conferences, certifications)
If you claim a deduction you’ll need to keep thorough records of your incurred expenses, including mileage reports, when driving for work.