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Are my subscriptions tax deductible?

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Are my subscriptions tax deductible?

One of the best parts of working for yourself is discovering new expenses that you can write off to lower your taxes. You’re probably aware that you can write off your home office and travel expenses, but what if we told you that you could also write off your subscriptions? That’s right, if you work as an independent contractor, freelancer, gig worker or any kind of self-employed individual, you can claim certain publications and subscriptions as tax deductions when you file your taxes. Use this self-employment income tax calculator to plan ahead and find industry-specific deductions. But of course, the IRS never makes it totally easy. These subscriptions still have to assist you in operating your business in some way for you to claim them. So you could potentially write off Netflix on your taxes, it just has to make sense for your line of work.
Key takeaways:
  • Self-employed individuals can write off subscriptions
  • This deduction can only be claimed if it is relevant and/or essential to your business

Table of contents

Subscriptions as a tax deduction...Read more

What kind of subscriptions can I write off?...Read more

How can I calculate my subscription tax deduction?...Read more

Subscriptions as a tax deduction

So, subscriptions are a legitimate tax deduction but you have to jump through a few hoops before you can write them off. Generally, you can write off any expense that is “ordinary and necessary” for your business. But subscriptions aren’t always a necessary part of someone’s work. So, is Spotify a tax deduction? An Uber driver who pays for Spotify every month to make the drives more pleasant for their passengers can claim it as a deduction. And even though that expense isn’t technically necessary for the job, it improves customer experience and could get the driver a better rating, which could lead to more business. On the other hand, a freelance social media manager can’t say that her Spotify subscription is tax-deductible even if she uses it everyday while working. Using a 1099 taxes calculator is an easy way to find relevant business expenses you can deduct.
Image discussing subscription expenses for self-employed individuals. Examples given include Harvard Business Review, Netflix, Dropbox Business, Adobe Photoshop, and LinkedIn Premium. Some expenses can be written off for taxes.

What kind of subscriptions can I write off?

Self-employed individuals can typically write off just about any kind of subscription as long as it helps them run their business. But since the IRS doesn’t really have a set list of deductible subscriptions, it really depends on what you do for work. A freelance legal consultant might pay for a membership at a local law society for research and networking purposes. This membership fee can be written off. But if a self-employed artist pays for the same membership just because they are interested in going to law school, that expense is not tax-deductible. This is because every subscription that is written off must be essential to your current business, and not to a career you are looking to pivot into. If you use an app like Flyfin, an A.I. will scan your linked expenses and find every tax deduction you can use. If you want more specific advice, you can reach out to the team of CPAs who are experts in 1099 taxes, and are available 24/7. They can also help you by preparing and filing your federal and state tax returns.
Image listing common tax-deductible subscriptions including video and audio streaming, software, trade associations, and literary subscriptions. Useful for tax purposes for self-employed, 1099, and freelancers.
Knowing what subscriptions you can write off can also be helpful if you have to make estimated tax payments every quarter. You can use a quarterly tax calculator to check whether you’ll owe the IRS over $1,000 in tax this year. If you’ve somehow missed a tax deadline and weren’t able to pay on time, don’t worry, the IRS isn’t going to send you to prison. Just use a tax penalty calculator to calculate your total penalties and try to pay them off as soon as you can.

How can I calculate my subscription tax deduction?

We’ve talked a lot about the different types of subscriptions you can write off, but now we’re going to tell you how to actually do it. Depending on your line of work, you can either claim a 100% tax deduction on a subscription or calculate its business use percentage. Let’s say you’re a self-employed nail technician. You have your own studio and have Netflix playing in the background while you attend to your clients. This qualifies you to write off your subscription as a tax deduction. But since you also watch Netflix in your personal time, you’ll need to calculate your business use percentage. Say you have Netflix films streaming in your studio five hours a day, five days a week for a total of 100 hours per month., You also use it for personal use in your down time about 60 hours a month, on average. Together they total 160 hours per month. To find your business use percentage, you just have to divide the number of hours you use Netflix for work by the total number of hours you use Netflix each month and multiply that by 100. For this example, that gives us a business use percentage of about 63%. So, that means you can write off 63% of your Netflix subscription at the end of the year.
Learn how to calculate business use percentage for a streaming service subscription like Netflix to claim tax deductions. Ideal for self-employed and freelancers.
If you also pay $22 a month for Photoshop, which you use only to edit and post your nail art pictures to your Instagram account, you can claim a 100% tax deduction on it since you only use it for your business. You will report all these deductions on Schedule C, on Box 27a under “Other expenses.” This form is filed as part of Form 1040. Claiming these types of expenses as tax deductions is a useful way to lower your taxable income. Make sure to always keep consistent records of your usage and your business use percentage calculations so that you’re not left scrambling during tax season.

Depreciation Tax Deduction

The depreciation tax deduction can be claimed for any asset that is used for business. There are three methods to calculate this deduction.

Education Expenses Tax Deductible

Education expenses are tax-deductible for self-employed individuals as long as they are related to their current job. Report the deductions on Schedule C.

Internet Bill Tax Deduction

For many who work from home, the internet is necessary for doing business. For some people, their internet bill counts as a tax write-off.

Write Off Your Car Payments

There are many tax deductions you can take related to your car, if you use it for work, but unfortunately your car loan payment isn't one of them.

Home Office Deduction

How the home office deduction saves self-employed individuals and freelancers on their taxes.

Home Improvement Deduction

What qualifies as a home improvement tax deduction and how homeowners who are self-employed or freelancers can benefit most.

Travel Expense Deduction

If you travel for work as a freelancer, there are a number of travel expenses you can claim as tax deductions in 2024 – find the details here.

Food and Entertainment Deduction

For 2024, you can deduct 50% of the cost of business meals as tax deductible – but not every meal can be deducted. This is relevant to self-employed people.

Car depreciation tax

Here's how to take advantage of depreciation, one of the biggest tax deductions people who use their car for work can take.

Car tax write off

Many freelancers drive their own vehicle for business and may qualify for certain car and mileage tax deductions.

Moving expenses deduction

Until recently, you could deduct moving expenses on your tax return. Recent changes to the tax rules have impacted whether you can deduct moving expenses.

Simplified home office deduction

If you use space in your home as an office for your business, you can take either the actual home office deduction or the simplified home office deduction.

Rent Tax Deduction

If you're self-employed, there are few ways you can write off your rent, and if you know how to use them, they can be among the most important ways to save money on taxes each year.

Side Hustle Taxes

Self-employed individuals can write off business expenses when filing side hustle taxes. You can avoid paying taxes on side jobs if your net income is under $400 in a year.

Mileage Tax Deduction

Get a car mileage tax deduction using either the standard mileage deduction or actual expenses deduction. You will report this on Schedule C.

Cell Phone Tax Deduction

A cell phone tax deduction is available to self-employed individuals if it is used for their business. They can also write off their internet usage.

Business And Consultant Tax Deduction

Consultant tax write-offs are useful in lowering self-employment taxes. Sole proprietors can use a QBID to lower taxable income, as they are a pass-through business entity.

Is Credit Card Interest Tax Deductible?

Credit card interest is tax-deductible if it is from a business-related purchase. You can write off a portion of the interest even on a personal credit card if it comes from a business expense.

Are Office Expenses Deductible?

The home office tax deduction is used to write off your home office and office-related expenses. Claim it using the standard or simplified method.

Advertising And Marketing Expenses Deduction

Marketing tax deductions related to promoting a business can be claimed by self-employed individuals. Report them on Schedule C.

Business Startup Costs and Deductions

Business startup costs can be amortized over 15 years. You can also deduct up to $5,000 in the first year if total costs are below $50,000.

Vehicle Write Off For Business

Vehicles used for business can be a tax write-off in 2024. You can claim this deduction even if you lease your vehicle under the actual expenses method.

Depreciation Tax Deduction

The depreciation tax deduction can be claimed for any asset that is used for business. There are three methods to calculate this deduction.

Education Expenses Tax Deductible

Education expenses are tax-deductible for self-employed individuals as long as they are related to their current job. Report the deductions on Schedule C.

Internet Bill Tax Deduction

For many who work from home, the internet is necessary for doing business. For some people, their internet bill counts as a tax write-off.

Write Off Your Car Payments

There are many tax deductions you can take related to your car, if you use it for work, but unfortunately your car loan payment isn't one of them.

What’s FlyFin?

FlyFin caters to the tax needs of freelancers, gig workers, independent contractors and sole proprietors. It offers a host of cutting-edge tax tools that help you quickly find deductions. You can also use tools like a home office deduction calculator. FlyFin uses an A.I. to track all your business expenses automatically and find every possible tax deduction. Once you have all your possible deductions in one place, our CPA team files a guaranteed 100% accurate tax return for you. It saves you a couple of thousand dollars and a ton of time on your taxes. Download the app and have your taxes filed in minutes, saving time and more money on your taxes than last year, guaranteed.
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