Business expenses that are being used to deduct taxes must be ordinary and necessary for your freelance work. Depending on the type of work you do, this can range from office supplies to advertising, airline tickets, lodging and business meals.
Sourcing from the Bonsai blog, here's a list of 35 common freelance tax deductions you can start claiming today:
Day-to-day supplies and overhead freelancer deductions
1. Office supplies
The cost of office supplies can add up: small businesses with one to four employees spend up to $92 a month on office supplies alone. From notebooks and pens to printer ink and desk organizers, be sure to keep receipts as you buy supplies so you can claim them come tax time. This is a particularly useful tax deduction for artists, who may frequently have to purchase art supplies to support their work.
2. Hardware
The laptop you use to create logos for your clients can be considered a freelance designer tax deduction! Whether you use a computer, smartphone, camera, or other types of hardware for your work, you can claim it as a deduction as long as you can prove it’s used in your business.
3. Software
You can also claim the software you use to keep your business running, including your accounting software like Bonsai. If you use the software for both business and personal use, you may have to estimate what percentage of the time it’s used for business when claiming.
4. Internet bills
You likely won’t be able to claim all of your internet expenses on your taxes, but you will be able to claim a certain percentage. To do so, you’ll have to estimate what percentage of time you actually use your internet for your business.
5. Phone bills
If you use your phone for your business — whether it’s to call clients or using your data to post to social media — you can also claim a percentage of your regular cell phone bill on your taxes.
6. Office space
Whether you pay for a co-working space or work from home, the good news is you can claim your office space on your taxes! To use the home office deduction, however, you need to make sure a portion of your home is dedicated only to the use of your business. Then, you’ll have to calculate what percentage of your home is considered your “business percentage” to see how much of a deduction you’re eligible for.
7. Vehicle expenses
Vehicle expenses are a common type of freelance photographer tax deduction, or for any freelancer who travels by car for their work. Generally, any business use of your vehicle is eligible for a deduction of 58 cents per mile driven on your Form 1040.
8. Product supplies
This is another common tax deduction for artists or anyone who sells physical products in their freelance business. If you spend money on supplies to create your products, be sure to keep records of your purchases so you can claim them come tax time.
9. Contract labor
Do you hire additional help for your business? Maybe you paid someone to create your website, or to write some blog posts or sales emails. Keep track of any invoices paid to contractors (including other freelancers), so you can claim those labor expenses on your taxes.
Professional development freelance tax write-offs
10. Professional development expenses
Common professional development expenses for freelancers might include conference tickets, paid webinars, or industry events. Be sure to hold on to your receipts for these events and activities, and keep any payment confirmation emails organized in your inbox.
11. Education
You don’t have to go to college or university to claim education expenses on your taxes. Seminars, online courses, and any other work-related training are eligible!
12. Licenses
Some freelancers require special licenses to do their work, including cosmetologists, lawyers, and investors. If you operate in one of these industries, you may be able to claim your license fees on your taxes.
13. Research materials
Freelancers may need to complete research for a wide range of reasons. This is a popular freelance writer tax deduction, as content writers often have to do in-depth research for articles or ebooks. However, you may have also done some market research before starting your business, or some technical research and development if you sell a product. Most expenses related to your research are eligible for deductions.
Marketing tax write-offs for your side business
14. Advertising
You may already know that print ads, Facebook ads, Google ads, and Pinterest promotions are eligible for tax deductions. But, did you also know that your business cards, sponsorships, and other advertising materials are also tax-deductible?
15. Online tools
The online tools you use to run and promote your business are also tax-deductible. That might include the email software you use for your weekly newsletter, your web hosting services, paid premium versions of social networks, and so on.
16. Affiliate commissions
Established freelancers may use an affiliate system for their business, whereby they pay others to promote their products or services for them in return for a commission. If you use this type of marketing in your business, the commissions you paid can be tax-deductible.
17. Memberships
Many freelancers choose to join groups to promote their business and widen their reach. If you need to pay membership fees to partake in such groups, be sure to claim them come tax time.
Client and work-related freelance write-offs
18. Travel expenses
Your business-related travel is tax-deductible. This is a common freelance musician tax deduction to cover touring costs, but can also be used if you travel for conferences or client meetings. If you’re tracking your freelance expenses as you go, these freelance tax deductions should be reasonably easy to identify and claim.
19. Meals
Some business-related meal costs are tax-deductible, but the IRS does have stricter limitations on this expense. Business meals are usually OK, while entertainment-related expenses (like popcorn at the movies, or drinks at a weekend conference) aren’t deductible.
20. Transaction fees
Third-party transaction fees can be a pain, but luckily they’re tax-deductible. Look for hidden transaction fees in the platforms and tools you use to manage your business, like PayPal, Etsy, Creative Market, and so on.
21. Gifts for clients
From desk plants to books to stationery, there are a lot of great gifts for clients out there — and you may be able to deduct those costs at tax time. However, there is a $25 limit per client.
22. Unpaid invoices
Unpaid freelance invoices are never fun, but the good news is that you have the chance to write them off on your taxes as bad debt. You will have had to report the unpaid invoice as income, however.
Payments for services
23. Legal services
If you paid a lawyer this year to draft up a contract for you or consult you on a tricky situation, you can claim their fees on line 17 of your taxes.
24. Accounting services
The fees you pay your CPA are also tax-deductible, including whatever they charge you to prepare your taxes.
25. Health insurance
As long as you have made a profit in your freelance business this year, you can claim any health insurance payments on your form 1040. That includes medical, dental, and long-term care insurance payments.
26. Insurance premiums
You can also claim any premiums paid on any additional insurance you have. Common insurance types for freelancers include worker’s compensation, credit insurance, liability or malpractice insurance, or any insurance that covers fire, storm, theft, accident, or similar losses.
27. Other professional services related to your freelance business
As long as the service you’re paying for is related to your business, you can claim them on your taxes. That could include anything from cleaning services for your home office to professional consultations.
Other freelance tax deductions
28. Interest
Paying interest on your business loan? That’s tax-deductible, along with any interest you’re paying on credit cards or debit cards. Keep in mind, however, that the expenses you’re paying interest on must be related to your business.
29. Banking fees
If your bank charges you fees related to your business — such as any time you accept a payment from a client — you may be able to deduct them from your taxes.
30. Retirement plan
Planning for retirement is so important if you are self-employed. Setting up a Simplified Employee Pension Plan (SEP) IRA is an excellent option for freelancers, as you can contribute up to $56,000 in 2022 and claim it all back as a tax deduction.
31. Depreciation
If you use equipment in your business that goes through general wear and tear throughout the year, such as computers and cameras, this type of tax deduction helps you offset its value depreciation overtime.
32. Repairs
Maintenance and repairs made to your equipment, supplies, and even your office space can be claimed on Line 21 of your form 1040.
33. Charitable deductions
Have a cause that’s near and dear to your heart? Consider the philanthropic act of giving it some of your hard-earned cash, as most charitable donations made on behalf of your business are tax-deductible. Be sure to check the IRS rules on Charitable Contributions to make sure you’re eligible.
34. Medicare and Social Security tax
If you’re self-employed, you have to pay taxes on your consulting fees or other freelance income. However, you can deduct half the cost of taxes you pay to Medicare and Social Security. This does not apply to you if you are registered as an LLC, however.
35. Other taxes
This can be a hard one to wrap your head around, but you can deduct some tax payments from your freelance taxes. For example:
Real estate taxes paid on your businesses’ property (including a percentage of your home office, if applicable)
Federal unemployment tax
State taxes
Local taxes