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Tax deductions for freelancers
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Profession-wise Tax Deduction for Freelancers
Being self-employed has a lot of perks- you get to choose and make your own decisions, you choose your working hours, and you get to follow your passion. However, it’s an entirely different story when it comes to taxes.
With the rise in self-employment, many taxpayers are unsure what they can or cannot deduct when they file their tax returns. As a self-employed individual, you must learn about the business expenses that qualify as legitimate tax deductions.
We’ve curated a list of common tax deductions that you as a self-employed worker can apply for, such as-
- Home Office
- Rent
- Education
- Business Meals
- Business Travel
- Utilities
- Advertising & Marketing
- Office Supplies
- Phone & Internet
- Credit Card Expenses
- Business Loan
- Home Loan
- Memberships & Subscriptions
- Mortgage
- Consulting and Professional Service Fees
- Health Insurance Premiums
- Charitable Contributions
- Retirement Plan
Claiming these tax deductions is highly beneficial for freelancers taxes since it helps them save thousands of dollars and reduces their income tax liability.
The above-mentioned freelancer tax deductions can be claimed by any self-employed individual; however certain deductions are limited to specific freelance professions. According to the IRS, you can deduct any expense that is related to your profession as long as it is considered common and helps you in conducting your business.
The following represents profession-wise tax deductions for freelancers:
Artists
As a self-employed artist, you can deduct the cost of art supplies, art books, magazines, cost of tickets to art galleries, studio expenses, etc. Any electronics such as your computer, phone, tablet, etc., that you use to stay connected and learn new things for business are deductible .Moreover, you can deduct business expenses like printed business cards, brochures, and templates made for marketing and personal branding.
Personal Trainers
As a personal trainer, you can deduct the expenses associated with marketing, education, fitness equipment, gym gear, and gym membership.
Uber Drivers
If you are an Uber driver, you can claim certain tax write-offs that are specific to your professions such as car wash, car accessories, passenger goodies, Spotify/Serius XM, or any other music streaming subscriptions. You can also claim a tax deduction for mobile phone.
Airbnb Hosts
If you run a BnB where you host guests and rent out the rooms of your house, you can deduct the cost of repair and renovation, basic utilities, cleaning services, textiles and furnishings, video streaming services (Netflix, Amazon Prime, and Hotstar), electronics, and groceries.
Massage Therapists
If you’re a massage therapist you can deduct the business expenses associated with your profession such as training & certification, oils & lotions, massage furniture, website expenses, and music streaming services. These expenses can significantly lower your freelancer taxes.
Real Estate Agents
Real estate agents can claim business expenses related to their marketing activities, commissions paid to other agents, business insurance, training & certification, and office supplies such as pen, paper, stationery, etc.
Freelance Consultants
If you operate your business as a freelance consultant, you can deduct home office expenses, stationery, office supplies, and website expenses. They can also claim a tax relief on professional fees.
Freelance Designers
Freelance designers are eligible to claim tax write-offs such as electronic devices, website expenses, software, and subscriptions to online courses, journals, or art platforms are deductible.
Online Teachers
As an online teacher, you can claim the cost of educational props, classroom decor, electronics, stationery, cell phone and internet tax deduction, and stationery. Moreover, you can also claim the other common tax write-offs for self-employed.
Freelance Writers
As a freelance writer, you can claim deductions for research material, phone bills, stationery, electronics, conferences/seminars, website expenses, software, contractor labor, commissions, publication fees, legal and professional fees. You can deduct such common tax deductions along with the cost of writing tools such as Grammarly, kindle, stationery, and audiobooks.
Home Services
If you’re self-employed and a part of the hospitality industry, you can deduct the cost of cleaning supplies, protective gear (gloves, shoes, eye-protection glasses, safety jacket), mileage, and phone bill.
Social Media Influencers
If you’re a social media influencer and create content from your home office or studio, you can deduct a portion of all your home office expenses such as rent, utilities, mortgage, etc. Moreover, you can also deduct the cost of clothing and beauty products. Under certain circumstances, you can also deduct the business expenses incurred while on a vacation.
Photographers
As a freelance photographer, you can deduct the cost of the camera, and other photography equipment such as cameras, lenses, tripods, etc. You can also deduct the cost of editing software like Lightroom and Adobe Premiere. If you have a studio, whether, at home or some designated place, all the expenses associated with it are deductible. You can deduct a portion of your home office expenses such as rent, utilities, mortgage, etc. These expenses can significantly lower your freelancer taxes.
Journalists
As a freelance journalist, you can claim deductions for research material, phone bills, electronics (mic, camera, recorder), industry education, website expenses, software, contractor labor, legal and professional fees.
Event Planners
As an independent event planner, you can deduct the cost of event costs, online advertising, books, business cards, electronics, labor costs, conferences, and online programs.
Delivery Drivers
If you are a delivery driver, you can claim certain tax write-offs that are specific to your profession such as car wash, car accessories, gas expenses, meals, and costs associated with your car maintenance.
Online Sellers
As an online seller, you can claim marketing and advertising expenses, mileage or car expenses, office expenses, legal and professional fees, and the expenses incurred while traveling for business which includes the cost of transportation, lodging, and meals.
Independent Model
If you’re a freelance model, you can deduct the cost of photo shoots, auditions, business travel, business meals, accessories, wigs, clothing, and beauty products. Under certain circumstances, you can also deduct the grooming expenses incurred for a specific project.
Freelance Developer
As a freelance developer, you can deduct several business expenses to lower your independent contractor taxes. If you conduct your business from your home office, you can deduct a portion of all your home office expenses such as rent, utilities, mortgage, etc. Moreover, you can also deduct the cost of software, electronics, phone bill, etc.
Construction Contractor
As a construction contractor, you can claim some independent contractor tax deductions such as mileage, travel, and meals along with the cost of protective gear, gloves, helmets, subcontractor labor wage, etc. These deductions can help you lower your freelancers taxes.
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