Freelance tax deductions: a practical checklist

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A deductible business expense must generally be ordinary (common in your trade) and necessary (helpful for the business). Deductions reduce your profit, which lowers both income tax and self-employment tax. The IRS describes the standard in Publication 535.

Everyday business costs

• Software and subscriptions you use for work.
• Equipment and supplies. Small items are usually expensed right away; larger purchases may have special rules (the "de minimis safe harbor" is generally $2,500 per item or invoice for businesses without audited financial statements).
• Phone and internet: the business-use percentage.
• Professional fees: accountant, legal, bank and payment-processing fees.
• Marketing: website, domain, advertising.
• Education that maintains or improves skills for your current business (not training for a new career).
• Business insurance, licenses and dues.

Deductions with special rules

• Home office: needs regular and exclusive use. Try the home office calculator.
• Car and travel: use the standard mileage rate or actual costs, and keep a log. Try the mileage calculator.
• Meals: business meals are generally 50% deductible when they meet the rules. Keep the receipt and note who and why.
• Start-up costs: generally up to $5,000 can be deducted in the first year, with the rest spread over 15 years, subject to limits.

Deductions that aren't business expenses on Schedule C

• Half of your self-employment tax reduces adjusted gross income.
• Self-employed health insurance premiums may be deductible, limited by your profit and by whether you could get coverage from an employer.
• Retirement contributions to a Solo 401(k) or SEP IRA: see Solo 401(k) vs SEP IRA.
• Qualified business income deduction: up to 20% of qualified business income for eligible businesses, with limits at higher incomes. Our quarterly tax calculator applies it for simple cases.

Not deductible

Commuting, personal expenses, clothing that is suitable for everyday wear, and fines and penalties.

Keep records

You need receipts or other proof, plus a note of the business purpose. The IRS generally says to keep tax records for at least three years after filing. A simple spreadsheet works: grab our free expense tracker.

Tools that help

If tracking receipts by hand is the problem, an app can help. Keeper (affiliate link) scans your card and bank transactions for possible write-offs, and its tax plans include federal and state filing. Pricing is on Keeper's site; we last checked it on October 14, 2026 (14-day free trial).

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