100+ Work-From-Home Tax Deductions Every Freelancer Needs to Know
The world is changing, and so is how and where we work.
With more and more of us shifting to working from home, it’s important to know the financial benefits that come along with it.
Many business owners are surprised to learn that taxes are one of their biggest costs as an entrepreneur. Soul crushing, right? That’s why it’s so important to be aware of as many deductions and credits as possible to keep more of your money in your pocket!
Check out this list of 105 possible tax deductions and credits for business owners who work from home.
Accounting fees
Advertising and marketing
Auto expenses (see Auto Expenses Deep Dive below)
Adobe Creative Suite
Advertising
Banking fees
Blue light filter glasses
Building repairs and maintenance
Business association membership dues
Business cards
Business trips
Charitable deductions made for a business purpose
Child Tax Credit
City Taxes
Cleaning/janitorial services
Cameras
Collection expenses
Commissions to affiliates
Computer and tech supplies
Computer insurance
Consulting fees
Continuing education for yourself to maintain licensing and improve skills
Conventions and trade shows
Cost of goods sold
Coworking memberships
Credit card merchant service feeds
Depreciation
Desk
Display Ads
Drones
Earned Income Tax Credit
Education and training for employees
Equipment
Exhibits for publicity
Facebook Ads
Franchise fees
Freight and shipping costs
Furniture and fixtures (limits apply)
Google Ads
Gifts for customers (limits apply)
Health insurance premiums
Equipment repairs
Hard drives & digital storage
Headphones
Health savings account
Home office (see Home Office Deep Dive below)
Office chair
Instagram Ads
Interest paid
Internet (portion used for business)
Investment advice and fees
IRA contributions (limits apply)
Legal fees
Leased vehicle or equipment
Liability Insurance
License fees
LinkedIn Subscription
Losses due to theft
Marketing
Materials
Maintenance and repairs
Meals (see Meals Deep Dive below)
Microphones
Monitors
Mortgage interest on business property
Moving expenses
Newspapers and magazines
Office supplies and expenses
Payroll taxes for employees (including Social Security, Medicare, and unemployment taxes)
Parking and tolls
Pension plans
Phone (cell or home) (portion used for business)
Phone service
Phone applications
Postage
Print Ads
Printer & paper
Prizes for contests
Professional Coaching
Project Management Software
Rebates on sales
Research and development
Retirement plans
Royalties
Safe-deposit box
Sales Tax
Scanner
Security programs
Social media advertising
Software and online services
Storage Equipment
Storage rental
Subcontractors
Telephone (business use portion)
Transportation
Video equipment
Virtual workshops & seminars
YouTube channel
Wages and salaries paid to employees
Wethos back office services
Website design
Website hosting services
Wifi mobile hotspot
Workers' compensation insurance
Zoom and other telecommunication software
Auto Expenses Deep Dive
Driving to and from client meetings, conferences, and vendor locations are all considered business mileage. Commuting to and from your office or co-working space is NOT considered mileage. To deduct your auto expenses, the first thing you have to do is track your mileage. You are required to have a log of all business mileage throughout the year, as well as the total personal miles driven.
Actual Expense Method
The deduction is based on the portion of mileage used for business. You take your business use percentage (business miles divided by total miles) and multiply that by your total vehicle expenses for the year, and then that’s your deduction.
Simplified Method
Not interested in keeping track of every time you get gas? No worries. With the standard mileage deduction, you simply take the standard mileage rate and multiply it by your total business miles driven for the year.
Home Office Deep Dive
If you use a portion of your home exclusively and on a regular basis for business use, then you are allowed to deduct a portion of your home expenses, including:
Real estate taxes
Mortgage interest
Rent
Utilities
Insurance
Repairs & Maintenance
Regular Method
To use this method, you take your home office square footage and divide it by your total home square footage. You then multiply that percentage times your total home expenses to find your deduction.
Example: Molly has a home office that is 100 square feet that she exclusively uses for her marketing business. She rents her home, which is 1,200 square feet. Her total annual rent, renters insurance, and utilities cost $15,000. Her business use percentage is 8.3% (100 divided by 1,200), so her home office deduction is $1,250 ($15,000 times 8.3%).
Simplified Method
Not really up to keeping track of all of your home expenses throughout the year? Problem solved. Just multiply your home office square footage by the set rate of $5 to find your deduction. The maximum deduction allowed is based on 300 square feet.
Example: If Molly used the simplified method, she would take her office square footage (100) and multiply it by $5, so her deduction would be $500.
Meals Deep Dive
You can deduct 50% of your meals as long as you meet these requirements:
Meet with a business contact
Discuss business
Pay for your and their meal (it cannot be lavish or extravagant)
Exceptions
When traveling for business, ALL of your meals (even meals by yourself) are deductible.
Your meals with employees are only deductible if it is used to improve productivity.
If you offer an open house or office party, your meals are 100% deductible.
But just remember, while meals are deductible, entertainment expenses are NOT. These entertainment expenses include country club membership fees, golf tee fees, yoga classes, sporting events, etc.
Example: Kiara takes a client to a baseball game where she buys hot dogs and beers for herself and her client. The cost of the game is not deductible. However, she can deduct 50% of the cost of the food and drinks as long as they were purchased separately from the tickets.
It’s important to note that while this list is just a start when it comes to the potential tax deductions and credits available to freelancers and small business owners, not every one of these items is always an applicable deduction depending on your situation.
Want to know which of these 109 items are applicable for you? Schedule a free consultation with me to review your business expenses and s