25 Tax Deductions You Can Claim as a Freelancer

tax forms with pencil

From Yahoo Finance, Angela Ruth offers her list of 25 tax deductions that freelancers and independent contractors might be able to make.  She begins with some excellent advice to hire an accountant or trained tax professional to make you take the deductions properly.  Angela writes:

Before we jump into this list of 25 tax deductions that you can claim as a freelancer, here are a couple of very important tips.

The first is that you should still hire an accountant or trained tax professional. They’re the experts and they’ll inform you on what you can deduct and what you can not. They may even find some additional deductions that you never thought of.

The other pointer is that most deductions will be filed using Form 1040, Schedule C. (Keep that in mind as you continue reading because we’ll be discussing where to include that deduction on your form.)

1. Office space

Whether you own or rent, office space is probably the biggest deduction that you’ll claim as a freelancer (even if you work from home). This can be deducted by filling out Line 30 of Form 1040, Schedule C. In the past this was a complicated process, but the IRS simplified this deduction in 2010. According to the IRS, you can claim “$5 a square foot for up to 300 square feet.”

Keep in mind, though, that you don’t want to include Lines 16, 25 and 27 as well. These expenses all go in Line 30.

2. Office supplies

You can deduct all of your office materials like pens, paper, books and printer cartridges in Line 18. Keep this in mind when purchasing office supplies since you’ll want to keep all of your receipts.

3. Hardware and software

What if you use your personal laptop, computer, smartphone or tablet for work too? You may be able to deduct those gadgets — along with other electronics that are relevant to your business like a camera. Even services like Netflix and other software can be deducted as long as you prove they are needed in your business.

As a rule of thumb, don’t try to fool the IRS. But, if you keep a written log that details your use of hardware and software for work, you claim the business percentage. Before doing this, you should double-check with your CPA.

4. Health insurance

As the IRS states, “If you are self-employed, the IRS wants you to know about a tax deduction generally available to people who are self-employed.” This deduction would be for any medical, dental or long-term care insurance premiums that you’ve paid. This is only possible if you had a net profit from self-employment. In most cases you’ll be able to claim this deduction on Line 1 of Schedule A form 1040.

5. Insurance premiums

Speaking of insurance, freelancers can also claim insurance premiums like liability insurance, workers’ compensation insurance, malpractice insurance or insurance that covers you from fire, flood, storm or theft.

6. Travel expenses

If you’ve had to travel for business, such as attending an industry event or meeting with a client, you may be eligible to deduct items like flights, hotel rooms, car rentals and even dry cleaning. If you plan a vacation around your business trip you can only claim the portions of the trip that were business-related.

This information would be filled out in Line 24A.

7. Advertising

If you purchased ads, business cards, brochures, sponsorships or any other swag that has your business name on it, you can deduct these advertising expenses on Line 8. Online advertising can also be deducted.

Read the full story at 25 Tax Deductions You Can Claim as a Freelancer

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