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The Ultimate Guide to Itemized Deductions for Freelancers and Self-Employed Individuals

There’s no getting around paying taxes to the IRS. But there are ways to lower the amount you owe in taxes, and this is where self-employment deductions become super important. It can be overwhelming to keep track of which expenses are deductible and which are not, how much to deduct, itemized vs. standard deductions and how to calculate estimated deductions. Here, you'll find information about all of the most important itemized deductions,, like the home office deduction, that are available to self-employed individuals and freelancers and how to make the right itemized deductions to save the most on your taxes. You can use a tax deduction calculator to quickly find the estimated deductions that fit your specific eligibility.

What exactly is a deduction and how does it relate to taxes?

We've all heard the word tax deduction before, but we might not fully understand it. In fact, it can be overwhelming to try and understand how tax deductions work, even though, "deduct" is just a fancy word for subtracting or taking something away. When it comes to taxes, a deduction is essentially subtracting a certain amount from your gross income, or total income, in order to get the amount of your income that can be taxed by the IRS. So when it comes time to file your taxes, the IRS allows you to make itemized deductions from that taxable income, if your business expenses fall under certain conditions, requirements and rules.
Alt text: Image explaining tax deductions - how they work and reduce taxable income. Useful for self-employed, 1099 and freelance workers.

What expenses are tax deductible?

Running a business can be expensive and the costs can seem endless. But certain business expenses are tax deductible, meaning you can deduct the amount for the expense from the overall taxable income you had for the year. The IRS has a list of tax deductible items that can help you lower your taxable income. But before you look at any of the many conditions for each category of deductible business expense, the IRS requires that each expense be ordinary, necessary and reasonable, in order for it to be considered tax-deductible. And, the expense needs to benefit your business by helping increase profit.
Image showing deductible expense categories including home office, transportation, food, charitable contributions, health insurance and education expenses for tax purposes. Suitable for self-employed, 1099 and freelancers.

Home office deduction

You can claim this itemized deduction if you work from home and have a designated office space. The office must be your primary location for your business and used primarily for your business.

Home improvement deduction

Owning a home comes with countless responsibilities. The bright side of this is that some kinds of home improvements are tax deductible, depending on the situation and the type of changes you need to make to your home.

Food, groceries and entertainment deductions

You can write off meals and beverages when eating out both locally or when traveling, as long as they are for business purposes. Unfortunately, as of 2018 entertainment expenses are no longer eligible for any federal tax deductions. That means activities like golf outings or sporting events with clients, for example, are no longer eligible to be deducted from your taxes. You can claim an itemized deduction for groceries, however, if your work requires food for a work-related purpose, but can only write off 50% of the expense.

Travel deductions

Sometimes, we need to travel outside of our home state or region where we pay taxes to meet clients or business associates, or to conduct business. If your trip meets the qualifications, you can write off certain expenses including, lodging, transportation, meals and even dry cleaning.

Charitable contributions deduction

Charitable donations can also be tax-deductible if they meet specific criteria. You can donate money or goods such as furniture, household items or a car to a non-profit organization, a church or foundation, for example. Then you can either deduct the contribution as an itemized deduction on Schedule A, Form 1040, or take the standard deduction. For the 2021 tax year, you can now claim a standard deduction up to $300 for single filers, or $600 for married couples filing jointly.

Education tax deduction

If you’re working towards furthering your education, you may qualify for work-related education deductions including tuition, books, supplies and transportation.

Health insurance deduction

As a self-employed individual or freelancer, you’re allowed to deduct your healthcare premiums including dental insurance, medical insurance or long-term care (LTC) insurance regardless of whether you itemize your deductions or not.

Child tax credit

Having a kid is expensive. So if you have qualifying dependents, you may be eligible for the Child Tax Credit. In 2021, the federal government expanded the Child Tax Credit to offer greater support to Americans with children, but it reverted back to providing taxpayers with a credit amount of $2,000 for each dependent 17 years or younger from 2022.

What does itemizing deductions mean?

Once you know which expenses are eligible for a deduction, you can claim those deductions by itemizing them on your tax return. These deductions are also known as itemized deduction. To do this, you list out certain expenses on Schedule A or Form 1040. This reduces the amount of your taxable income, or the amount you pay to the IRS. The IRS needs proof of your expenses, in the form of receipts, canceled checks or bank statements.

Itemized vs standard deduction

When it comes time to make a deduction, you can either opt for the standard deduction, which is the most common option, or for an itemized deduction. Find out which is better for you with this time-saving calculator. Let’s make a quick itemized vs standard deduction comparison.
What’s a standard deduction? As the name suggests, the standard deduction is a standard or set deduction amount on the basis of your filing status. You will claim this deduction on the Form 1040 You must be wondering, what are itemized deductions? Itemized tax deductions are deductions taken for the exact amount you paid for a deductible expense like healthcare or a charitable donation. If you go the itemized tax deductions’ route, you will subtract each of these deductions from your annual gross income and report them on Schedule A attached to your tax return.
Let’s look at the list of itemized deduction examples:
  • Charitable donations
  • Home mortgage interest
  • Casualty and theft losses
  • Medical and dental expenses
  • State and local taxes
  • Property tax deductions
Image explaining the difference between itemized and standard deductions. Choose a set amount or exact expense paid based on filing status. Relevant for taxes and self-employed/1099/freelancers.

What are above-the-line deductions for 2023?

Deductions you subtract from your annual gross income (the total income you’ve earned for the year before deductions) to get your adjusted gross income (gross income minus any deductions) are called above-the-line deductions. It's clear to any taxpayer that the IRS requires anyone making an income to pay taxes on that income. But it might not be clear exactly which amount of your income is taxed. The IRS taxes only your adjusted gross income. But the good news is you can reduce the amount of your adjusted gross income that you will owe taxes on with above-the-line deductions. These deductions also help when paying estimated taxes. If you owe over $1,000 to the IRS, you'll need to make these payments quarterly. Maximizing your deductions can reduce this tax amount.
Infographic entitled 2023 Above-the-line Deductions and Adjustments to Income listing eight examples of tax deductions and income adjustments.
Every self-employed individual should know all the tax deductions available to them as a way to lower their tax bills. These tax write-offs let you pay less in taxes, giving you more money to invest back into your business.

What’s FlyFin?

FlyFin caters to the tax needs of freelancers, gig workers, independent contractors and sole proprietors. But anyone can file taxes through FlyFin! FlyFin tracks all your business expenses automatically using A.I. to find every possible tax deduction. Then, our CPA team files a guaranteed 100% accurate tax return for you – to save you a couple thousand dollars and a ton of time on your taxes. Download the FlyFin app and have your taxes filed in less than fifteen minutes, saving time and more money on your taxes than last year, guaranteed.

Expert tax CPAs ensure 100%-accurate tax filing

A.I. finds every tax deduction, eliminating 95% of your work

On average users save $3,700


FlyFin’s Advantage


A.I. finds every tax deduction eliminating 95% of your work


Expert tax CPAs ensure 100% accurate tax filing


On average users save $3,700

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