10 Tax Deductions Every Freelancer Should Know About

Maximize Your Tax Savings

One of the biggest advantages of freelancing is the ability to deduct business expenses from your taxable income. Yet many freelancers miss out on legitimate deductions simply because they don't know about them.

Disclaimer: This article is for informational purposes only. Consult a tax professional for advice specific to your situation.

1. Home Office Deduction

If you use part of your home exclusively for business, you can deduct a portion of your rent/mortgage, utilities, and insurance. The simplified method allows $5 per square foot, up to 300 square feet ($1,500 max).

2. Internet and Phone

The business-use percentage of your internet and phone bills is deductible. If you use your phone 60% for business, you can deduct 60% of the bill.

3. Software and Subscriptions

Any software you use for business is deductible:

• Design software (Adobe Creative Cloud)
• Project management tools (Asana, Trello)
• Invoicing software (like InvoicePad!)
• Cloud storage (Dropbox, Google Drive)

4. Professional Development

Investments in your skills are deductible:

• Online courses and certifications
• Industry conferences
• Books and publications
• Professional memberships

5. Health Insurance Premiums

Self-employed individuals can deduct 100% of health insurance premiums for themselves and their families from their taxable income.

6. Retirement Contributions

Contributions to SEP-IRA, SIMPLE IRA, or Solo 401(k) accounts reduce your taxable income while building your retirement savings.

7. Business Equipment

Computers, cameras, office furniture, and other equipment used for business can be deducted. Items over $2,500 may need to be depreciated over time.

8. Travel Expenses

Business-related travel is deductible:

• Airfare and hotels for client meetings
• Mileage for business driving (67 cents/mile in 2024)
• Meals during business travel (50% deductible)

9. Marketing and Advertising

All costs to promote your business:

• Website hosting and domains
• Business cards and printed materials
• Social media advertising
• Portfolio website costs

10. Professional Services

Fees paid to professionals who help run your business:

• Accountant and tax preparer fees
• Legal consultation
• Business coaching

Record-Keeping Tips

• Keep receipts for all business expenses
• Use a separate business bank account
• Track expenses throughout the year, not just at tax time
• Use accounting software to categorize expenses

Conclusion

Taking advantage of legitimate tax deductions can save you thousands of dollars each year. Start tracking your expenses now and consult with a tax professional to ensure you're maximizing your deductions.