Freelancers often work hard for their earnings. But if they keep good financial records (including all those 1099s), and prepare their tax returns correctly, freelancers can often tap into a number of deductions that can help lower their taxes and allow them to keep more of their hard-earned income.
1. Home Office
One of the most common deductions for freelancers, in order to claim a home office on your taxes, the designated space must be used regularly and exclusively for business operations and must be the principal location where business is conducted.
2. Office Supplies
3. Hardware and Equipment
4. Web Hosting and Online Tools
If you have a website and pay fees for web hosting, these expenses can likely be deducted from your taxes. If you use other online tools for your business (such as Dropbox or Zoom), fees you pay for these services can also usually be deducted.
If you use the internet, a landline phone, or a cell phone for business at least some of the time, these services may qualify for a deduction.
6. Start-Up Costs
You may be able to deduct up to $5,000 of initial purchases and investments made to get your business up and running. Purchases that exceed that amount can often be deducted over time.