As a self-employed professional, you may be eligible to deduct your health insurance
premiums and healthcare costs for you, your spouse, and dependents. If so, it can repre-
sent a significant reduction to your taxable income. The downside is that you can’t deduct
healthcare costs if you show a loss for the year. However, you can claim it on your per-
sonal Schedule A. Also, you cannot deduct any insurance costs for any months you were
eligible to participate in a group health insurance plan through your or your spouse's em-
ployer.
If you’re like me and use Paypal for billing, you can deduct their fees. Like other
small businesses who are able to deduct credit card convenience fees, Paypal fees are a
cost of doing business. Paypal makes it fairly easy, too. At the end of the year, simply
print out your account activity. Strike any personal transactions and take the viable busi-
ness expenses to your accountant.
While you can’t deduct your primary home phone line, you can deduct a secondary
line you use for business. If you use your mobile phone primarily for business, that can
be a deductible expense, as well as Internet phone applications such as Skype, if you buy
a phone number, voicemail, and other services.
Are you a member of any music union, associations, societies or business or music-
related groups? Dues and membership fees are deductible. The same goes for educational
expenses, trade publication subscriptions, business-related books, and fees paid to your
attorney, accountant, and other professionals.
At one point or another in your business, a client’s not going to pay you for services
rendered or royalties due to you. Hopefully, this won’t happen too often, but when it
does, the amount should be deductible as a bad debt. Bad debts become deductible when