The One Big Beautiful Bill Act (OBBBA) creates a new deduction allowing workers in tip-based industries to exclude qualifying tip income from federal taxable income. This is one of the most significant new deductions for service industry workers in decades.
A restaurant server earning $20,000/year in tips at a 22% federal rate saves $4,400/year in federal income taxes under the new tip income deduction.
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If you use your cell phone for business, you can deduct the business-use percentage of your monthly bill, data plan, and the cost of the device itself. For most self-employed professionals, this is 80–100% of the total cost.
A freelancer paying $120/month for their phone and using it 90% for business deducts $1,296/year, saving $389–$518 depending on tax bracket.
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If you rent a booth, chair, or suite in a salon or barbershop, your rental fees are fully deductible as a business expense. This is typically the largest deduction for booth renters — most pay $200–$600/week in booth rent, adding up to $10,400–$31,200/year in fully deductible expenses.
A hair stylist paying $350/week in booth rent deducts $18,200/year, saving $5,460–$7,280 in taxes.
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Gig delivery drivers can deduct all supplies and equipment used in their delivery business. This includes insulated delivery bags, hot bags, cold bags, phone mounts, car chargers, power banks, flashlights, and any other gear used to complete deliveries. These are small but real deductions that add up over a year of full-time delivery work.
A DoorDash driver spending $400/year on insulated bags, phone mounts, and car accessories deducts the full amount, saving $120–$160 in taxes.
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Booth rental fees paid to a salon owner are fully deductible as a business expense for self-employed hair stylists. Most stylists pay $400-$1,500/month in booth rent.
A hair stylist paying $800/month in booth rent ($9,600/year) deducts the full amount — saving $3,168 at 33%.
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Gym space rental fees, private studio rental, hourly facility rental, and co-working fitness space memberships used for training clients are fully deductible.
A personal trainer renting a private studio for $1,200/month ($14,400/year) deducts the full amount — saving $4,752 at 33%.
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Remote software engineers who work from a dedicated home office space can deduct a proportional share of rent, mortgage interest, utilities, and internet. Self-employed only — W-2 employees cannot claim this deduction under current tax law.
A freelance developer with a 180 sq ft office in a 1,400 sq ft apartment ($2,800/month rent) deducts $4,334/year in home office expenses.
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Rideshare drivers can deduct 70 cents per mile for every business mile driven in 2026. Track every mile from when you turn on the app to when you drop off your last passenger. Use Stride, MileIQ, or Everlance to automatically track mileage.
An Uber driver driving 30,000 miles/year deducts $21,000 at 70 cents/mile, saving $7,770 in taxes at 37%.
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New 1099 workers can deduct all startup costs in their first year: business registration fees, initial equipment purchases, website setup, business cards, and professional services. The IRS allows up to $5,000 in startup costs to be deducted in the first year (remainder amortized over 15 years). Also immediately deduct home office, vehicle mileage, phone, and internet from day one.
A new 1099 worker with $50,000 in income deducting $12,000 in home office, equipment, phone, and professional fees reduces taxable income by $12,000, saving $4,440 at 37%.
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The QBI deduction gives freelancers a 23% discount on all net business income starting 2026 — most miss it.
A Solo 401(k) can shelter up to ~$70,000/year from taxes in 2026 — far more than a traditional IRA.
Vehicle deductions require a mileage log — without it, the IRS will disallow the entire deduction.
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