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Freelancers, deductions are crucial: you can claim many business expenses to reduce your taxable income on your Schedule C (or Schedule C-EZ) if you’re not incorporated. If this is your first time filing self-employment taxes, it’s a good idea to consult a professional for guidance.
Grab lunch, open up Slack, and get ready for your afternoon break. It’s Work From Home Week! Whether you’re working from home for a day or making it your long-term setup, Mytour has got you covered with tips on staying productive, balanced, and sane.
Check out these deductions you can take advantage of this year:
Home Office Deduction
If you work from home, you can deduct a portion of your rent or mortgage if the space is exclusively used for work. (Temporary housing or hotel rooms don’t count.) For instance, if you’ve converted a guest room or studio into a “home office,” you can deduct that share of your mortgage if it meets the criteria of “exclusive and regular use.” This means it should only be used for business—no Airbnb rentals or turning it into a playroom for the kids—and most of your business activities should occur there (e.g., administrative tasks or billing).
Use Form 8829 to calculate the deduction, which is then reported on Form 1040 (Schedule C). The IRS has a detailed guide on this deduction, which is helpful if you’re thinking of claiming it. You can also deduct related costs like utilities, rent, and repairs/maintenance for your business/home office.
Office Supplies
Items like pens, paper, computers, and software are all deductible if they’re used for business, along with other equipment expenses depending on your profession. For example, a freelance writer may be eligible to deduct a magazine subscription.
Travel Costs and Meals
Business-related travel expenses, such as plane tickets, car fares, and hotel stays, are deductible, along with 50% of meal and entertainment costs. Only deduct the portion of the trip that’s for business (no vacation days included). If your trip involves meetings or other work-related activities, you can also deduct part of your mileage. For 2017, the standard mileage rate was 5 cents per mile.
Health Insurance Premiums
If you don’t have access to health insurance through an employer or spouse, you can deduct the cost of your health insurance premiums.
Professional Development
Courses that advance your career are deductible if they are relevant to your business, as are membership dues and fees for professional organizations. Additionally, you can deduct expenses related to your personal website, such as domain registration, design, and maintenance costs.
For additional details, take a look at this guide and visit the self-employed tax center from the IRS.
