17 Important Tax Deductions for Freelancers

May 18, 2022
Manage Your Bread

Nobody should pay more in taxes than they have to.

These are 17 different deductions you may be able to use to lower your tax bill:

Advertising & marketing

The IRS allows you to deduct reasonable advertising & marketing costs as long as they directly relate to your business

Computer & tools

If you need a computer to work or require a camera to do your job, you can generally deduct the full costs if being used exclusively for business

Contractor Costs

If you hire someone to help with your website, designing graphics, etc, you can generally deduct the cost

Courses

If you belong to a professional organization or community that helps your freelance career, the cost is generally deductible

Home office space

If you work at home, your ability to deduct the space is capped at $1,500 per year based on $5/sq. foot for up to 300 square feet

Home office supplies

Can deduct the cost of notebooks, pens, desk accessories, etc. Recommended to keep receipts.

Insurance premiums

If you have net profit from self-employment, you are generally able to deduct health insurance premiums

Loan interest

If you needed to take out a loan to support growth or bridge an income gap, you can generally claim the interest paid as a deduction

Memberships & Communities

If you belong to a professional organization or community that helps your freelance career, the cost is generally deductible

Professional services

If you hire a professional, such as a CPA to handle taxes, you can generally deduct the cost related to the business

Phone & internet

Even if they aren't exclusively for business use, you can still deduct a percentage of their monthly costs as long as they're used for business purposes

Retirement contributions

If you contribute to a tax-advantaged retirement account, you can deduct your contributions

Self employment tax

Since self-employed workers are subject to the 15.3% self-employment tax, you're able to deduct up to half of the self-employment tax amount

Startup costs

When setting up your business, if you need to pay for licensing, permits, professional fees, etc., you can generally deduct the cost of the services up to $5,000

Transaction fees

If you're payment processor takes a percentage of payments, you can generally write-off these fees

Unpaid invoices

If you use accrual-basis accounting and reported an invoice as paid prior to receiving payment and paid taxes on it, you can write it off as bad debt in the following year if remained unpaid

Website & softwares

Whether it be your website, email tool, or premium social account, you can generally deduct the cost as they're helping you grow you're business

Treyton DeVore

Treyton is a creative entrepreneur, writer, and financial planner.

He's been featured in Morning Brew, NerdWallet, Marketwatch, and more.

treytondevore.com

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