TaxClutch Blog
Can Freelancers Deduct Equipment and Software?
TaxClutch Team2 min read
Equipment and software are usually a freelancer's biggest deductible expenses outside of home office. The good news: you can deduct most of it the year you buy it, not over a depreciation schedule. Here's how to do it correctly, including the Section 179 deduction that turns a laptop purchase into a same-year tax break.
Business Equipment
- Laptops and desktops used for client work
- Cameras, microphones, lighting (for content, video, podcasts)
- External monitors and accessories
- Drawing tablets, drafting equipment
- Printers, scanners
- Furniture used in your home office (desk, chair, shelving)
Software
- Subscriptions: Adobe CC, Figma, Notion, Slack, Zoom
- One-time purchases: Sketch, Affinity Designer, Logic Pro
- SaaS tools: Mailchimp, ConvertKit, Calendly, ClickUp
- Domain registration and hosting
- Plugins, fonts, and stock asset subscriptions
Section 179 — Deduct Full Cost in Year of Purchase
Section 179 lets you deduct the full cost of equipment in the year you buy it, instead of depreciating over years. The 2025 limit is over $1.16 million — far above any freelance need. The catch: equipment must be purchased and placed in service during the same tax year you claim the deduction.
Section 179 turns a $3,000 laptop purchase in December into a $3,000 deduction on that year's return. No multi-year depreciation paperwork.
Bonus Depreciation — 100% in 2025, Phasing Down
Bonus depreciation is similar to Section 179 but with fewer income restrictions. For 2024, it dropped to 60%. For 2025, it's at 40%. By 2027, bonus depreciation is gone entirely. Section 179 is generally more favorable for solo freelancers since it has higher 2025 limits.
Mixed Use Rule
If equipment is used for both business and personal purposes, you deduct only the business-use percentage. A laptop used 80% for client work and 20% for personal browsing → deduct 80% of the cost. Track usage with a brief note (no need for hour-by-hour logs unless audited).
Documenting Equipment Purchases
- Save the receipt or invoice (not just the credit card statement)
- Note the business use percentage
- Keep proof of the date placed in service (purchase date works for most equipment)
- Photograph serial numbers for high-value items in case of future questions
Frequently Asked Questions
Can I deduct a phone I use for both work and personal?
Yes — at the business-use percentage. Most freelancers can defensibly claim 50-80% business use. Document the percentage with a brief note (e.g. 'Phone used 70% for client communication, calls, and email').
What's the difference between Section 179 and bonus depreciation?
Both let you deduct full cost in year of purchase. Section 179 has more flexibility and higher 2025 limits. Bonus depreciation is phasing out (40% in 2025, 0% in 2027). For solo freelancers, Section 179 is usually the better choice.
Do I have to use Section 179 — can I depreciate instead?
Yes, you can choose to depreciate (typically over 5-7 years for most freelancer equipment). This is rarely beneficial unless you want to spread deductions across years for tax-planning reasons.
Is software always deducted in the year purchased?
Yes for subscriptions and SaaS. For perpetual-license software (rare now), it can be either Section 179 in year of purchase or amortized over 36 months — Section 179 is typically simpler and better.
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