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5 Deductions Solo CPAs Miss

Five commonly-overlooked Schedule C deductions — and the IRC section that supports each one. Spot them on your own return before they spot you in an audit.

Solo CPAs and enrolled agents running their own practice on Schedule C leave real money on the table every year — not because the deductions are exotic, but because their own return is the last one they review and the first one they rush. Here are five we see missed most often, with the IRC section that supports each.

1. Home office deduction for the practice (IRC §280A)

A dedicated space used regularly and exclusively for the practice qualifies, even if it is a corner of a spare bedroom. The simplified method ($5/sq ft up to 300 sq ft) covers most solo practices; the regular method wins when the space carries a mortgage or rent allocation.

2. Self-employed health insurance premiums (IRC §162(l))

100% of premiums paid for the practitioner, spouse, dependents, and any children under 27 at year-end are an above-the-line adjustment. Easily the largest missed deduction on a solo return — and unlike an itemized medical deduction, it does not require the 7.5% AGI floor.

3. Solo 401(k) employer contribution (IRC §401(c)(2))

The practitioner can wear two hats: employee (elective deferral up to the §402(g) limit) and employer (profit-sharing contribution up to 25% of net self-employment earnings). On a solo return netting $200k, a properly structured Solo 401(k) routinely moves $60k+ out of current-year taxable income.

4. SEP-IRA for any part-time W-2 spouse (IRC §408(k))

If a spouse earns any self-employment income from a side activity — even a few hundred dollars filing a Schedule C — the practitioner can fund a SEP-IRA contribution against that income. The plan covers the spouse too, doubling the household retirement tax shelter under one filing.

5. Business mileage tracked but never claimed (IRC §162 + Rev. Proc. 2019-46)

Mileage between client sites, bank runs, court appearances, networking meetings — all deductible at the standard mileage rate. The trap: solo practitioners track the mileage on a phone app and never carry it to the return because their bookkeeper does not know it is there.

Closing

Each of these carries a clean IRC citation that an auditor accepts. The scanner in Taxerity.AI checks all five against the practitioner’s own return the same way it checks them on client returns — same evidence pattern, same flag, same review surface.

Related posts

A solo-CPA triage guide to the four nexus triggers (physical, economic, click-through, marketplace facilitator), the UDITPA three-factor apportionment formula, and the per-state filing stack — with the four-step workflow on /tax-planning that absorbs the reciprocity/apportionment layer under the same Circular 230 §10.35 owner review as the federal return.

Three §469 patterns that flip a real estate investment from passive to non-participation — and the practitioner-side paperwork each one requires to hold up at audit.

A solo retainer that survives the year-2 IRS notice cycle is a retainer whose engagement letter split notice response out of the base fee before the first CP2000, CP2501, or Letter 2201 landed. How to price the per-engagement scope, where flat-fee vs. hourly each wins, and what Treasury Circular 230 §10.35 requires on every written deliverable.

Next post in the series

Michigan solo-CPA review on the CIT base

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