What Business Expenses Are Tax Deductible for Freelancers?

Ordinary means common and accepted in your trade or business. Necessary means helpful and appropriate for your business. Both have to be true. A laptop is ordinary AND necessary for a freelance designer. A new car is necessary for a delivery driver but might not be ordinary for a writer.

'Necessary' doesn't mean 'absolutely required.' It means 'reasonable for the business.' The bar is lower than people think.

• Advertising: Google ads, Facebook ads, sponsorships
• Car/Truck: mileage at $0.67/mile, or actual expenses business %
• Commissions/Fees: payment processor fees, contractor payments
• Depreciation: large equipment over 1+ year
• Insurance: business liability, errors & omissions
• Interest: business loan interest, business credit card interest
• Legal/Professional: lawyers, accountants, bookkeepers
• Office Expense: postage, printer paper, office supplies
• Rent: office or storage space (not home office — that's separate)
• Repairs: equipment maintenance
• Supplies: anything consumable used in the business
• Travel: flights, hotels, transit (business-purpose trips)
• Meals: 50% if business purpose documented
• Utilities: business location utilities (separate from home office)
• Wages: paid to employees (rare for solo freelancers)

• Phone bill — business percentage based on actual use
• Internet — business percentage (most freelancers can defensibly claim 70-100%)
• Streaming services — only if used for review/research (not just background music)
• Books — deductible if related to your professional work
• Coffee shop visits — only if paired with client meeting or business discussion

• Personal expenses (groceries, personal clothes, entertainment)
• Fines and IRS penalties
• Political contributions
• Lobbying expenses
• Bribes and illegal payments
• Country club or social club dues
• Commute from home to your regular workplace (different from home-office-to-client trips)

For each business expense, you need: date, amount, vendor, business purpose. Receipts ideal. Bank/card statements work for most expenses under $75. The business-purpose note matters most for borderline items (meals, travel, mixed-use). A one-line description is enough — 'Lunch with client X to discuss Q3 contract.'

A deduction reduces your taxable income. A credit reduces your actual tax. Credits are more powerful dollar-for-dollar — a $1,000 credit saves $1,000 in tax, while a $1,000 deduction saves only $200-$400 (depending on bracket). Most freelancer benefits are deductions, but a few credits exist (like the Saver's Credit for retirement contributions in lower brackets).