Self-employed individuals can deduct legitimate business expenses that reduce their taxable income before it’s taxed at the full income + SE tax rate. A well-run freelance business claiming all allowable deductions can reduce its effective tax rate significantly. This checklist covers every deduction category the IRS allows for Schedule C filers.
Above-the-Line Deductions (Especially Valuable)
These deductions reduce your Adjusted Gross Income (AGI) directly, independent of whether you itemize or take the standard deduction:
| Deduction | Where to Claim | 2026 Limit |
|---|---|---|
| Half of self-employment tax | Schedule 1, Line 15 | 50% of SE tax calculated |
| Self-employed health insurance premiums | Schedule 1, Line 17 | Net SE income (can’t exceed profit) |
| SEP-IRA contributions | Schedule 1, Line 16 | 25% of net SE income, max $70,000 |
| Solo 401(k) employee contributions | Schedule 1, Line 16 | $23,500 (+$7,500 if 50+) |
| Solo 401(k) employer contributions | Schedule 1, Line 16 | 25% of net SE income |
| SIMPLE IRA contributions | Schedule 1, Line 16 | $16,500 (+$3,500 if 50+) |
Schedule C Business Deductions
Home Office
Who qualifies: You use a portion of your home regularly and exclusively as your primary place of business or for meeting clients.
Two calculation methods:
- Simplified: $5/sq ft × business square footage (max 300 sq ft = max $1,500)
- Regular: (Business sq ft ÷ total home sq ft) × actual expenses (rent, utilities, homeowner’s/renter’s insurance, repairs, depreciation of home)
What “regular and exclusive” means: The space must be used only for business — no personal use allowed in that area. A guest bedroom that’s also your office doesn’t qualify. A clearly designated home office does.
Vehicle and Transportation
Mileage log required. You must track business miles with a contemporaneous log (date, starting point, destination, purpose, miles).
Two methods (choose per vehicle, first year is binding unless you use actual expenses from the start):
- Standard mileage rate: $0.70 per business mile (2026 IRS rate) — simplest method
- Actual expenses: Total vehicle costs (gas, insurance, registration, repairs, depreciation) × business-use percentage — better for expensive vehicles with high business use
What counts as business mileage: Client meetings, site visits, office supply runs, bank runs for business, driving to meet your accountant. Does NOT count: Commuting to a regular office, personal errands.
Equipment and Technology
- Computers, laptops, tablets used for business
- Printers, scanners, external drives
- Cameras, lighting, audio equipment (for content creators)
- Industry-specific tools and equipment
Section 179: Deduct the full cost in the year of purchase (up to $1,220,000 in 2026) instead of depreciating over several years. Must be used more than 50% for business.
Bonus Depreciation: 40% of asset cost can be immediately expensed in 2026 for new equipment not fully covered by Section 179.
Software and Subscriptions
- Business software (QuickBooks, Adobe Creative Cloud, Slack, Zoom, Asana)
- Professional databases and research tools
- Industry-specific SaaS subscriptions
- Domain registration and web hosting
- Business-use portion of general subscriptions (e.g., LinkedIn Premium, Notion)
Phone and Internet
- Business phone line: 100% deductible
- Personal cell phone: Business-use percentage only (document how you calculated this)
- Home internet: Business-use percentage only
Professional Services
- Accounting and bookkeeping fees
- Legal fees for business matters
- Business consulting fees
- Payroll processing fees
Insurance
- General liability insurance premiums
- Professional liability (E&O) premiums
- Business property insurance
- Workers’ compensation premiums
- Note: Health insurance is deducted separately (see above-the-line deductions)
Marketing and Advertising
- Website design and maintenance
- Online advertising (Google Ads, Facebook/Meta Ads, LinkedIn)
- Print advertising and promotional materials
- Business cards, signage, branding
- Social media management tools
Office Supplies and Materials
- Printer ink, paper, pens, notebooks
- Postage and shipping for business purposes
- Industry-specific supplies and materials
Business Meals
- 50% of qualifying business meals (with clients, partners, or employees discussing business)
- Must document: date, location, business purpose, and who attended
- Entertainment (sporting events, concerts) is no longer deductible
Education and Training
- Continuing education courses directly related to your trade or business
- Professional certification costs
- Business books and publications
- Industry conference attendance and registration fees
- Note: Education to enter a new profession is not deductible — only education that maintains or improves skills in your current work
Business Bank Fees
- Monthly business checking account fees
- Wire transfer fees for business transactions
- Business credit card annual fees
Retirement Plan Costs
- Setup and administration fees for SEP-IRA, Solo 401(k), or SIMPLE IRA
Documentation Best Practices
| Record Type | How Long to Keep |
|---|---|
| Business expense receipts | 3–7 years |
| Mileage log | 3 years |
| Home office records | Duration of ownership + 3 years |
| Equipment purchase records | Duration of ownership + 3 years |
| Business bank and credit card statements | 7 years |
| Tax returns with schedules | 7 years minimum |
The IRS standard: “Clear and convincing” evidence that the expense was (1) ordinary in your industry, (2) necessary for your business, and (3) paid in the tax year you’re claiming it.
- Freelancer Tax Guide 2026 — SE tax, quarterly payments, and filing overview
- Self-Employed Retirement Plans — maximize the retirement contribution deduction
- Health Insurance for the Self-Employed — the 100% premium deduction
- Self-Employed Hub — complete self-employed financial guide
The content on Wealthvieu is for informational purposes only and should not be considered financial, tax, or investment advice. Consult a qualified professional before making financial decisions. Full disclaimer · Editorial policy