Can I Deduct This? 50 Common Freelance Expenses Explained

The Quick Reference Guide

Every freelancer has wondered "Can I deduct this?" Here's a definitive guide to 50 common expenses.

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Fully Deductible (100%)

1. Laptop/computer used for business
2. Software subscriptions (Adobe, Office 365, etc.)
3. Domain names and web hosting
4. Business insurance (liability, E&O)
5. Office supplies (paper, ink, pens)
6. Business phone line (dedicated business number)
7. Accounting software (QuickBooks, FreshBooks)
8. Professional memberships and dues
9. Business licenses and permits
10. Legal fees for business matters
11. CPA/tax preparation fees
12. Business banking fees
13. Contractor payments (1099 workers you hire)
14. Shipping and postage
15. Online courses related to your business
16. Business books and reference materials
17. Co-working space membership
18. Business travel (flights, hotels)
19. Marketing and advertising costs
20. Website development costs

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Partially Deductible

1. Cell phone (business-use percentage only)
2. Home internet (business-use percentage)
3. Business meals (50% deductible — see our business meals deduction guide)
4. Car expenses (business miles only)
5. Home office (based on square footage percentage)
6. Personal vehicle insurance (business-use percentage)
7. Utilities (home office percentage)
8. Computer used for both business and personal (business percentage)

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Deductible with Conditions

1. Health insurance premiums — if you're not eligible for employer coverage
2. Retirement contributions — within contribution limits
3. Education expenses — must improve current business skills
4. Gifts to clients — up to $25 per recipient per year
5. Home repairs — only if they affect the office area
6. Clothing — only if it's a required uniform or costume, not everyday clothes
7. Travel meals — 50% while traveling for business (learn the rules in our business meals deduction guide)
8. Entertainment — generally NOT deductible since 2018 (meals with business discussion still are at 50%)

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Commonly Asked About

1. Spotify/music subscription — YES, if you use it for work (background music for focus, music industry professional)
2. Gym membership — Generally NO, unless fitness is central to your business (personal trainer, fitness instructor)
3. Coffee shop purchases — Partially. The coffee itself is generally not deductible, but if you're meeting a client, the meal/drink is 50% deductible
4. Childcare — NOT a business deduction, but you may qualify for the Child and Dependent Care Credit
5. Pet expenses — Generally NO, unless the pet is used in your business (pet photographer, service animal)
6. Clothing/wardrobe — NO for everyday business clothes. YES for uniforms, costumes, or specialized protective gear
7. Haircuts — Generally NO, even if you meet clients
8. Netflix — NO, unless you're in the entertainment/media industry and it's research
9. Amazon Prime — Partially, if you can show business use (fast shipping for business supplies)
10. Parking — YES for business-related parking
11. Tolls — YES for business-related travel
12. Tips — YES, they're part of the meal or service cost
13. Student loans — NOT a business deduction (separate student loan interest deduction may apply)
14. Charity donations — NOT a Schedule C deduction (itemize on Schedule A instead)

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The Rule of Thumb

An expense is deductible if it is:

1. Ordinary — common and accepted in your industry
2. Necessary — helpful and appropriate for your business

Deductions can vary by profession — check out our tax deductions by profession guide or browse specific guides for photographers, graphic designers, consultants, and more.

When in doubt, keep the receipt, note the business purpose, and ask your CPA.

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