Tax deductions every
freelancer should know.
The IRS lets self-employed people deduct most ordinary business expenses. Most freelancers claim the obvious ones and miss hundreds — sometimes thousands — of dollars in legitimate deductions.
When you file Schedule C, you can deduct any expense that is "ordinary and necessary" for your business — meaning it's common in your industry and appropriate for your type of work. The IRS doesn't require perfect documentation for every dollar, but you need enough evidence to support each deduction if you're ever questioned.
The deductions most freelancers miss.
Deduct a percentage of rent, utilities, and internet proportional to the square footage used exclusively for work. The simplified method lets you deduct $5 per square foot up to 300 sq ft — no complex calculations needed.
If you pay for your own health, dental, or vision coverage — and aren't eligible for a spouse's employer plan — you can deduct 100% of the premiums. This reduces your adjusted gross income directly, not just your taxable income.
Design tools, project management apps, accounting software, cloud storage, domain hosting — any subscription used for your business is deductible. For dual-use tools, deduct only the business percentage.
If you use your phone and internet for business — and virtually every freelancer does — deduct the business-use percentage of both bills. A reasonable estimate like 70% or 80% is acceptable without a detailed log.
Computers, cameras, microphones, printers — equipment bought primarily for business can be deducted in full in the year of purchase under Section 179, rather than depreciated over years. This is almost always the better choice for freelancers.
Online courses, books, certifications, industry conferences, professional memberships — deductible if they maintain or improve skills required in your current work. Cannot be used for training in a new career field.
Business mileage — the one most people track wrong.
If you use your personal vehicle for client meetings, supply runs, or job sites, you can deduct a set amount per mile. The IRS updates the standard mileage rate annually — historically around $0.67–$0.70 per mile for business use.
What qualifies: client visits, supply store runs, post office trips for business mail, job sites, business events. What doesn't: your regular commute — unless your home is your principal place of business, in which case all business driving qualifies.
The IRS requires a mileage log with date, destination, business purpose, and miles for each trip. Apps like MileIQ work well, as does a simple spreadsheet. Our mileage log template is pre-built with exactly what the IRS requires.
Meals and entertainment.
Business meals are 50% deductible when you discuss business with a client, partner, or employee and you are present at the meal. Entertainment (concerts, sports events) is no longer deductible after the 2017 Tax Cuts and Jobs Act.
To deduct a meal: keep the receipt and note on it who was present, what was discussed, and the business purpose. That note doesn't need to be elaborate — "Strategy meeting with client Maria, discussed Q2 project scope" is sufficient.
Retirement contributions — the highest-value move most freelancers skip.
A SEP-IRA lets you contribute up to 25% of net self-employment income — capped at a limit set annually by the IRS (over $60,000 in recent years). Every dollar contributed is a dollar off your taxable income. This single strategy can reduce a freelancer's tax bill by thousands of dollars, and the majority of self-employed people don't use it.
A Solo 401(k) can allow even higher contributions and is worth comparing depending on your income. Talk to a financial advisor about which vehicle fits your situation.
Documentation: the only rule that matters.
For deductions under $75, a written record is technically sufficient. For anything over $75, you need a receipt. The IRS can audit your return for three years after filing — six years if they suspect significant underreporting. Keep records at least that long.
Pre-built spreadsheet with all Schedule C expense categories and a mileage log that meets IRS requirements. Track as you go — walk into tax season with everything already organized. Available on Etsy.