Tax Write Offs for a Freelancer


A common mistake made by more than a few freelancers is the failure to take full advantage of available tax write offs. From day one, a freelancer must understand that he or she essentially is a small business owner. As a result, a freelancer is entitled to take many of the same types of tax write offs that are enjoyed by small business owners of different types.


One key area in which a freelancer can take tax write offs is when he or she travels for business purposes. For example, a freelance can gain valuable experiences by attending a conference or convention. Because this is a business related endeavor, the expenses associated with a trip to a conference or convention are tax deductible.

100 percent of the costs associated with travel and lodging for a business trip are tax deductible. In addition, a freelancer can write off 50 percent of the meals spend while on a business trip, even if he or she is eating alone and not with a customer or client.

Home Office

Many freelancing experts recommend that a freelancer establish and maintain a home office. The furnishings and equipment utilized in a home office are tax deductible. In addition, the cost associated a certain percentage of rental or mortgage payments are also tax deductible (at least as of this time).

What this means is that a freelancer can make a tax deduction based on a computation that centers on the space specifically used for a home office. For example, if a freelancer lives in a 1,000 square foot townhome and uses 200 square feet as a home office, he or she can deducted 20 percent of his or her rental or mortgage payments at tax time.

Software applications associated with a freelancer’s work are also deductible. Keep in mind that this can include security software and even basic office suites that also may have a personal application as well. It is important to identify which software products are specifically for business purposes. In addition, a freelancer needs to identify the percentage of a shared application that is used for business as well as personal purposes. The business component is deductible while the personal element cannot be utilized as a tax write off.

Healthcare Costs

Certain healthcare related costs are deductible for a freelancer. If you establish your freelance business as a sole proprietorship with the Internal Revenue Service, the Internal Revenue Code is likely to permit a full deduction for all of your healthcare expenses.

Bad Debts

In some cases, a freelancer may be able to write off bad debts. By bad debts it is meant money owed to the freelancer, and not money owed by the freelancer. For example, in some situations a freelancer may be able to writer off a bill a customer or client fails to pay.

In order to deduct this type of bad debt, a freelancer will need to utilize accrual accounting. By using accrual basis accounting, a freelancer is able to write off accounts that have become uncollectable from customers or clients.

When trying to ascertain whether or not a freelancer can deduct an uncollectable bill involving a customer or client, he or she should consult with a tax professional. This best ensures that a freelancer will not make an error when it comes to filing taxes.

Business and Professional Fees

A freelancer can deduct money spend on bona business and professional fees. These deductible costs can include everything from membership dues for professional organizations and associations to seminars and educational programming. Books and other educational resources associated with a freelancer’s professional can also be deductible. Certain magazine subscriptions may also be deductible, provided the publications in question has a direct bearing on a freelancer’s professional efforts.

Phone Calls and Phone Expenses

A freelancer is likely to have the need to make professional phone calls with at least some regularity. In addition, in this day and age, a freelancer is very likely to use his or her mobile device to undertake a variety of business related tasks. As a result, the costs associated with phone calls, with the use of a mobile device more broadly, and the mobile device itself may be tax deductible.

In many instances, a freelancer is likely to use the same mobile device for both professional and personal purposes. There is nothing unlawful or inappropriate about that practice. What a freelancer needs to be certain to do is separate out accurately the professional and personal use of a mobile device.

About the Author

Jessica Kane is a professional blogger who writes for Faxage a leading company that provides Internet fax service for individuals and businesses.


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