Tax Write-Offs for Your Solopreneur or Freelance Business
Solopreneurs and freelancers can deduct home office costs, mileage, health insurance premiums, equipment, and more. Here's what qualifies and how each deduction works.
Bizee Editorial Staff
Editorial Team
Introduction
Solopreneurs and freelancers can deduct a wide range of business expenses — home office costs, mileage, health insurance premiums, equipment, travel, and more. These deductions reduce your taxable income, which lowers what you owe at tax time. Most are reported on Schedule C of Form 1040.
Home office deduction
If you work from home, you can deduct the portion of your home used for business — but only if that space is used regularly and exclusively for work. A dedicated room qualifies. A kitchen table you also use for dinner does not.
The IRS offers 2 ways to calculate this deduction. The simplified method lets you deduct $5 per square foot of your home office, up to 300 square feet — so a maximum of $1,500. The regular method deducts the actual percentage of home expenses (rent, mortgage interest, utilities, insurance) that correspond to your office's share of the home's total square footage. The regular method takes more recordkeeping but often produces a larger deduction.
Note that employees working from home are not eligible for this deduction under the Tax Cuts and Jobs Act of 2017. It applies to self-employed individuals only.
Vehicle and mileage deductions
If you use a vehicle for business purposes, you can deduct those costs on Schedule C. You have 2 options: the standard mileage rate or the actual expense method. Most solopreneurs find the standard mileage rate easier to track.
The standard mileage rate for 2025 is 70 cents per mile for business use. That rate covers depreciation, fuel, insurance, repairs, and maintenance — you don't deduct those separately if you use the standard rate. Keep a mileage log with the date, destination, and business purpose for every trip.
The actual expense method lets you deduct the business-use percentage of your real costs: gas, registration fees, parking, insurance, and repairs. This requires more documentation but can produce a larger deduction if your vehicle costs are high.
Business equipment and software
Equipment and software you buy for your freelance business are deductible — but how you deduct them depends on how long they last. Items with a useful life of one year or less are deducted in full in the year you buy them. Items that last longer than a year are normally depreciated over time.
Section 179 of the tax code lets you elect to deduct the full cost of qualifying equipment in the year you place it in service, rather than spreading the deduction across several years. Bonus depreciation works similarly and may allow you to deduct a percentage of the cost upfront. A tax professional can help you figure out which approach makes sense for your situation.
Common deductible items include computers, monitors, cameras, microphones, printers, and business software subscriptions. The key test: is the expense ordinary and necessary for your trade or business?
Travel, meals, and professional development
Business travel expenses are 100% deductible when the trip is ordinary and necessary for your work. Deductible costs include airfare, train or bus fare, lodging, taxis, rental cars, parking, and tolls. The trip must take you away from your tax home — generally the city or area where your main place of business is located.
Meals during business travel are 50% deductible. Meals with clients where you discuss business are also 50% deductible. Keep records of who you met with, what you discussed, and the business purpose. The IRS also allows you to use the federal per diem rate for travel meals instead of tracking actual receipts, which simplifies recordkeeping.
Professional development costs — courses, books, certifications, and conference fees directly related to your current work — are deductible. Business gifts to clients are deductible up to $25 per person per year.
Advertising, marketing, and professional fees
Money you spend to market your freelance business is deductible as an ordinary and necessary business expense. This covers a broad range of costs that solopreneurs often overlook.
- Advertising campaigns and paid social media promotions
- Business cards, brochures, and printed materials
- Domain registration and website hosting fees
- Website design and maintenance costs
- Fees paid to accountants, attorneys, and other professionals for business-related services
- Payments to subcontractors or other freelancers you hire for project work
- Business insurance premiums, including general liability and professional liability coverage
- Office supplies used for your business
Internet and phone expenses are also deductible, but only the business-use portion. If you use your phone 60% for business, you can deduct 60% of the bill. Keep records that support the percentage you claim.
Self-employment tax deduction
When you're self-employed, you pay both the employee and employer portions of Social Security and Medicare taxes — a combined rate of 15.3% on net self-employment income. That's a real cost, but there's a partial offset built into the tax code.
You can deduct half of your self-employment tax from your gross income on Form 1040. This deduction reduces your adjusted gross income, not just your taxable income, so it applies whether or not you itemize. It doesn't eliminate the tax, but it does reduce the income on which your regular income tax is calculated.
Retirement contributions are another deduction worth knowing about. Self-employed individuals can contribute to a SEP-IRA, SIMPLE IRA, or solo 401(k) and deduct those contributions. Contribution limits are higher than standard IRA limits, which makes these accounts a meaningful way to reduce taxable income while building retirement savings.
Recordkeeping and documentation
Every deduction you claim needs to be backed by records. The IRS can ask you to substantiate any expense, and without documentation, a deduction can be disallowed. Good records also make filing faster and less stressful.
- Receipts and invoices for all business purchases
- Bank and credit card statements showing business transactions
- A mileage log with date, destination, and business purpose for every business trip
- Records showing the business-use percentage for shared expenses like phone and internet
- Contracts or agreements with clients and subcontractors
A dedicated business bank account and a separate business credit card make this much easier. When all your business income and expenses run through accounts that are separate from your personal finances, you don't have to sort through personal transactions at tax time. Most solopreneurs who skip this step end up spending hours reconstructing records they could have captured automatically.
FAQ
Self-employed allowable expenses are costs that are ordinary and necessary for running your business. The IRS defines these as expenses common in your industry and helpful for your work. Common examples include home office costs, vehicle mileage, equipment, software, health insurance premiums, advertising, professional fees, and business travel. You report these on Schedule C of Form 1040 to reduce your taxable income.
It depends. A Spotify subscription is deductible only if it's ordinary and necessary for your specific business. A podcast producer, music teacher, or content creator who uses Spotify for research or background music in client-facing work has a reasonable case. Someone who uses it for personal listening does not. The IRS requires that the expense be directly connected to your trade or business — personal use doesn't qualify, and mixed-use subscriptions are only deductible for the business-use portion.
The IRS standard mileage rate for business use in 2025 is 70 cents per mile. You multiply your total business miles by 70 cents to get your deduction. This rate covers fuel, depreciation, insurance, and maintenance — you don't deduct those costs separately when using the standard rate. Keep a mileage log with the date, destination, and business purpose for every trip you plan to deduct.
Yes. Self-employed solopreneurs and freelancers can deduct 100% of health insurance premiums for themselves, their spouse, their dependents, and children under age 27. This includes medical, dental, vision, and qualified long-term care insurance. The deduction is claimed on Form 1040 as an above-the-line deduction, so it reduces your adjusted gross income. You need net profit from self-employment to claim it — if your business shows a loss for the year, the deduction doesn't apply.
No. You don't need an LLC to claim self-employed tax deductions. Sole proprietors who haven't formed a legal entity can claim the same deductions on Schedule C. That said, forming an LLC can make recordkeeping cleaner by separating your business and personal finances — which makes it easier to document the deductions you're already entitled to claim.
It depends on your situation. The simplified method is $5 per square foot, up to 300 square feet, for a maximum deduction of $1,500. It's straightforward and requires minimal recordkeeping. The regular method calculates the actual percentage of your home expenses — rent, utilities, insurance — that correspond to your office space. It takes more documentation but often produces a larger deduction if your home costs are high. A tax professional can help you figure out which method saves you more.
