Taxes. An unpleasant topic for everyone, but even more so for the self-employed. Yet, it's sadly unavoidable. Whether you're an owner of an LLC, partner, or sole proprietor (yes, we're looking at you, freelancers and gig workers), you're subject to self-employment taxes. You'll feel the weight of self-employment taxes more than you would if you were paying taxes as an employee of a business. That's because employers share the tax burden with employees and pay half the Social Security and Medicare costs. As a business owner, you're both the employer and the employee—meaning you have to pay the total tax on your own. Bummer. But it's not all spilled milk and frowny faces. There are steps you can take now to reduce your self-employment taxes and pocket more of your hard-earned cash. Read on to learn 4 ways you can lower your self-employment taxes come tax season. 1. Up Your Business Expenses Sounds crazy, right? But it works. Self-employment tax is a fee based on your business's net income. If your expenses go up, your net income goes down—thus decreasing your self-employment tax obligation. Make sure you're only claiming eligible business expenses. These include accounting fees, advertising costs, delivery charges, salaries, software, and so much more. But the afternoon coffee you bought as a pick-me-up to get work done probably won't qualify. Or the Uber ride you caught to your cousin's bowling party where you just so happened to hand out business cards. Track all of your business expenses using bookkeeping software, like Lendio's software, to make sure you have documented proof of all your eligible expenses. 2. Adjust Your Business Structure Any self-employed individual is going to have to pay taxes, but the way you do it varies by business type. If you're a sole proprietor or owner of an LLC, you'll need to complete a Schedule C. If you're a member of a multi-member LLC or partner in a partnership, then you'll need to prepare partnership tax returns and a Schedule K-1. One of the best business structures for reducing your self-employment taxes is the S corporation. With an S-corp, the money your business makes stays in the business by default. You'll only take home cash when you decide to pay yourself a salary, and only the payment you take home is subject to employment taxes. So if your business makes $100,000 and you pay yourself a salary of $75,000, then you'll only pay self-employment taxes on the $75,000 you paid yourself (not the $25,000 you kept in your business). Make sense? 3. Deduct Your Self-Employment Taxes Yes, you heard us right. You can claim up to half of your self-employment taxes as a deduction on your income taxes. So this doesn't technically decrease your self-employment taxes, but it does reduce the total amount of money you'll hand over to the IRS come tax time. Look for other deductions that will decrease your taxable income, and thus mitigate your self-employment taxes: \tInterest paid on your small business loans \tTravel-related costs: mileage on your car, food, plane tickets, hotels, etc. \tExpenses for your home office \tPremium costs of your health insurance and business insurance \tCosts of renting an office space 4. Utilize Tax Credits Tax credits are similar to tax deductions, but they're not the same. A tax deduction reduces your taxable income by cutting a percentage (depending on your tax bracket) for every dollar you deduct. Tax credits, on the other hand, lower your taxes dollar for dollar—it's a beefed-up, better version of tax deductions. Tax credits are the government's way of incentivizing small business owners to invest in things like electric cars, accessibility, new markets, and health insurance for employees. Browse through the IRS's list to find eligible tax credits that can help you pocket more money. Here are a few common credits: \tIf you've spent money building a handicap-accessible ramp or producing audio materials for hearing-impaired individuals, you can qualify for up to $5,000 in disabled access credits. \tInvestment tax credits are given to businesses that invest in sustainable business practices like reforestation, building rehabilitation, and alternative energy for business use. So if you've purchased solar panels, your business may be able to get credit for 10% of your expenditures for up to $10,000 per year. \tWork opportunity credits can be claimed for hiring employees who've faced challenges in finding employment. These individuals could be disabled veterans, ex-felons, food stamp recipients, or members of other categories defined by the IRS. Lower Your Self-Employment Taxes While taxes can be a huge pain and a tricky beast to tame, you can reduce the amount you owe and boost the cash you take home. Yes, these self-employment tax-reducing tactics can be tedious and time-consuming, but they can save you thousands of dollars every year. Put in the hard work, and you'll reap the financial rewards come tax season. The information provided in this post does not, and is not intended to, constitute tax advice; instead, all information, content, and materials available in this post are for general informational purposes only. Readers of this post should contact their tax professional to obtain advice with respect to any particular tax matter.