U.S. Tax Court Gives Two Thumbs Down to Self-Employed Movie Critic's Tax Claim

Being self-employed can be advantageous from a tax perspective. An extensive list of deductible business expenses can offset the federal income tax due on amounts derived from a self-employed individual's business activities. The list includes health insurance premiums and retirement plan contributions made by the business owner.

Note, however, that you can't get off entirely scot-free. If you're self-employed, you must pay self-employment (SE) tax on your taxable business income, the equivalent of FICA tax for employees. As a recent U.S. Tax Court case shows, you can't avoid the tax simply by designating amounts as "other income" on your tax return (Clark v. Commissioner, TC Memo 2025-13, February 5, 2025).

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