Freelancer Tax Deductions: What You Might Be Missing (And How to Maximize Your Savings in 2025)

🧾 What Expenses Can Freelancers Deduct?

The IRS allows you to deduct “ordinary and necessary” business expenses—those that are common in your field and helpful for running your business.

🚗 Business Mileage & Vehicle Use

• If you drive to client meetings, networking events, or to pick up supplies, you can deduct your business mileage.

• The IRS standard mileage rate for 2025 is 70 cents per mile.

• Keep a mileage log or use a mileage tracking app for proof.

🏠 Home Office Deduction

• If you work from home and use part of your space regularly and exclusively for business, you can deduct home office expenses.

• Choose the simplified method (based on square footage) or calculate based on actual rent, utilities, and maintenance costs.

• Contrary to popular belief, claiming a home office does not trigger an automatic audit.

💻 Business Software & Subscriptions

• Tools like QuickBooks, Adobe Creative Suite, Canva, Zoom, and social media management software are 100% deductible—as long as they’re used for business.

• Be sure to separate personal and business use and document it appropriately.

💡 Common Freelancer Deductions You Might Be Missing

These often-overlooked expenses can add up to significant savings:

🩺 Health Insurance Premiums

If you pay for your own health insurance and aren’t covered through a spouse’s plan, you may be able to deduct 100% of your premiums.

💼 Startup Costs

Expenses like forming an LLC, building a website, or purchasing business equipment? You can deduct up to $5,000 in your first year.

💳 Payment Processing Fees

Platforms like Stripe, PayPal, and Venmo charge fees—and these are fully deductible, even if the platform doesn’t itemize them on your income report.

📢 Marketing & Advertising

Freelancers often spend on brand design, Facebook/Instagram ads, SEO tools, and content creators. These marketing costs are fully deductible.

🧾 Professional Services

Legal fees, bookkeeping, accounting, and tax prep (for your business returns) are all deductible professional services.

🪙 Retirement Contributions

Contributions to Solo 401(k)s or SEP IRAs can reduce your taxable income while building your retirement fund.

🎓 Online Courses & Continuing Education

If you take courses to enhance your current skills—like a copywriter learning SEO or a designer updating Adobe skills—those costs are deductible. But switching careers? That education typically isn’t.

📅 Don’t Forget Quarterly Estimated Tax Payments

As a freelancer, you’re responsible for paying self-employment taxes and income taxes quarterly. Missing payments can lead to penalties.

Pro Tips:

• Set aside 25–30% of your income in a separate savings account.

• Use accounting software or a tax professional to stay on top of deadlines.

• Make your quarterly payments on time: April, June, September, and January.

📂 Treat Your Freelance Work Like a Real Business

The IRS wants to know you’re operating professionally. That means:

• Keeping detailed financial records

• Sending invoices

• Logging expenses

• Acting with the intent to earn a profit (not as a hobby)

Doing so not only helps during audits—it also makes your business more efficient and profitable.

✅ Final Thoughts: Don’t Leave Money on the Table

Freelancers wear many hats: creator, marketer, project manager, bookkeeper—and often tax preparer. But if you’re not leveraging every deduction available to you, you could be losing thousands of dollars every year.

At Belshaw Accounting, we specialize in helping freelancers and service-based professionals keep more of what they earn—with strategic tax planning, smart deduction strategies, and year-round support.

📞 Need help reviewing your deductions or planning for the upcoming tax year? Let’s talk. Whether you’re just getting started or scaling your freelance business, we’re here to help you feel confident and save money.