5 Tax Deductions Most Tradespeople Miss

If you're a solo tradesperson — plumber, electrician, HVAC tech, contractor, or landscaper — you're almost certainly paying more in taxes than you need to. Not because you're doing anything wrong, but because nobody ever sat you down and explained which deductions you're entitled to.

The tax code is full of provisions that benefit self-employed people, but most tradespeople only claim the obvious ones: materials, tools, and maybe gas. Meanwhile, there are five major deductions that solo trade businesses routinely miss, and together they can easily save you $5,000 to $15,000 a year.

Disclaimer: This article is educational content, not tax advice. Tax laws change, and your situation is unique. Always consult a CPA or tax professional for advice specific to your business.

1. Home Office Deduction

The most common reaction from tradespeople: "I don't have a home office — I work on job sites." But here's the thing — the desk where you write estimates, the kitchen table where you do bookkeeping, the spare bedroom where you store your files and handle customer calls — that counts.

The IRS offers two methods. The simplified method is easy: multiply your workspace square footage (up to 300 sq ft) by $5. A 200-square-foot spare bedroom gives you a $1,000 deduction with zero additional recordkeeping.

The regular method requires more work but often yields more. Calculate the percentage of your home used for business and apply it to your actual housing costs — mortgage, utilities, insurance, property taxes, and depreciation. A 10% business-use percentage on a $2,000/month mortgage can yield $2,400 or more annually.

Key requirement: The space must be used "regularly and exclusively" for business. A dedicated desk in a spare room works, but you can't claim the couch where you sometimes do invoicing.

2. Vehicle Expenses

Most tradespeople just write off gas receipts and call it a day. That's leaving money on the table. You have two options.

The standard mileage method uses the IRS rate (70 cents per mile for 2025). At 25,000 business miles a year, that's a $17,500 deduction covering gas, insurance, depreciation, and maintenance in one number.

The actual expense method tracks all vehicle costs — gas, tires, insurance, repairs, loan interest, depreciation — and multiplies by your business-use percentage. At 80% business use on $15,000 in total costs, you deduct $12,000.

The critical part: You need a mileage log. The IRS requires records of every business trip — date, destination, purpose, and miles. Use Crewkit's free mileage log template or a phone app. Without a log, you lose the deduction in an audit.

3. Section 179 Equipment Deduction

Normally you'd depreciate equipment over several years. Section 179 lets you deduct the entire purchase price in the year you buy it. Tools, equipment, computers, software, and vehicles over 6,000 pounds all qualify.

Example: you buy a $45,000 work van. Instead of deducting $9,000/year for 5 years, you deduct $45,000 in year one. At a 22% tax bracket plus 15.3% self-employment tax, that saves you roughly $16,785 in taxes immediately.

Important note: The asset must be used more than 50% for business. If your truck is 70% work, you deduct 70% of the cost.

4. Self-Employed Health Insurance Premiums

If you pay for your own health insurance (medical, dental, vision for you and your family), the premiums are deductible. But here's why people miss it: it's not on Schedule C. It goes on Schedule 1 as an "above-the-line" deduction, and many tradespeople — even some tax preparers — never claim it.

At $600/month for a family plan, that's $7,200 in annual deductions. At a 30% combined tax rate, you save $2,160.

Eligibility: You can't be eligible for a spouse's employer-sponsored plan, and the deduction is limited to your net self-employment income. If you buy through healthcare.gov with premium tax credits, consult a CPA — the math gets complex but the deduction usually still applies.

5. Retirement Contributions (SEP-IRA or Solo 401k)

This is the most powerful tax deduction available to self-employed tradespeople. A SEP-IRA lets you contribute up to 25% of net self-employment income (up to $69,000/year). It takes 15 minutes to open online.

A Solo 401(k) is even better: contribute up to $23,000 as an employee plus 25% of net income as an employer, with a combined limit of $69,000 ($76,500 if you're 50+). It also offers a Roth option.

Example: a solo electrician earning $120,000 contributes $48,000 to a Solo 401(k). At a 22% federal rate, that saves $10,560 in federal taxes alone. The money isn't gone — it's invested and growing tax-deferred for your retirement.

The deadline: SEP-IRA contributions can be made up to your tax filing deadline. Solo 401(k) plans must be established by December 31. Don't wait.

Bonus: The Often-Overlooked Ones

Beyond the big five, don't overlook these:

• Cell phone: Deduct the business-use percentage of your plan (80% business use = 80% deductible).
• Tools and supplies: Every work tool is deductible. Keep receipts — small purchases add up.
• Continuing education: Certification renewals, code seminars, and trade conferences are all deductible.
• Work clothing: Uniforms, safety boots, hard hats, and branded shirts you wouldn't wear outside work.
• Trade association dues: PHCC, ACCA, NECA, and local trade association memberships.
• Software: QuickBooks, estimating tools, scheduling apps, and advertising on Yelp or Angi.
• Business loan interest: Interest on loans for tools, vehicles, or equipment.

Track It All Year, Not Just at Tax Time

The biggest reason tradespeople miss deductions isn't ignorance — it's disorganization. You know you can deduct mileage, but you don't have a log. You know tools are deductible, but the receipts are in a pile somewhere. You meant to set up a SEP-IRA, but December came and went.

The fix is simple: set up your tracking systems at the beginning of the year and update them regularly. Crewkit's free tax and financial templates include mileage logs, expense trackers, quarterly estimated tax calculators, and deduction checklists — all designed for trade businesses. Download them, put them in a folder on your computer, and spend 15 minutes a week keeping them current.

Fifteen minutes a week of bookkeeping could save you $10,000 or more at tax time. That's a trade anyone should be willing to make.

Remember: This article is for educational purposes only and does not constitute tax, legal, or financial advice. Tax laws vary by state and change frequently. Consult a qualified CPA or tax professional for guidance specific to your situation.