As a self-employed person, you're taxed on your net profit — gross income minus business expenses. Every legitimate deduction you claim reduces both your income tax and your 15.3% self-employment tax. A $1,000 deduction saves a freelancer in the 22% bracket approximately $373 ($220 income tax + $153 SE tax). Most self-employed workers leave thousands on the table by missing deductions they're entitled to.
Everything below applies to sole proprietors, single-member LLCs (taxed as sole props), independent contractors, freelancers, and gig workers who file a Schedule C. These are reported on your Schedule C (Form 1040) unless noted otherwise.
The 13 deductions every self-employed person should know
If you use part of your home regularly and exclusively for business, you can deduct it. The simplified method: $5 per square foot of dedicated office space, up to 300 sq ft ($1,500 max). The regular method: calculate the percentage of your home used for business and apply that to rent/mortgage interest, utilities, insurance, repairs, and depreciation.
The "exclusive use" test is strict — the space must be used only for business. A desk in the corner of your bedroom qualifies if that corner is used exclusively for work. A kitchen table where you also eat dinner does not.
If you drive for business — client meetings, deliveries, job sites, supply runs — you can deduct the cost. The standard mileage rate for 2025 is 67 cents per mile (the IRS announces the 2026 rate in late 2025). At 15,000 business miles, that's a $10,050 deduction.
The alternative: deduct actual expenses (gas, insurance, maintenance, depreciation, registration) multiplied by your business-use percentage. You must choose one method and keep a contemporaneous mileage log either way. For rideshare-specific guidance, see our Uber/Lyft deduction guide.
If you pay for your own health insurance and are not eligible for coverage through a spouse's employer, you can deduct 100% of premiums for medical, dental, and qualifying long-term care insurance. This is an above-the-line deduction on Form 1040 — not a Schedule C deduction — meaning it reduces your AGI whether or not you itemize.
The deduction cannot exceed your net self-employment income. It also applies to marketplace (ACA) plans. For a full breakdown of your insurance options, see our health insurance guide.
You pay 15.3% self-employment tax on net earnings (12.4% Social Security + 2.9% Medicare). The IRS lets you deduct the employer-equivalent half (7.65%) as an above-the-line adjustment. On $60,000 net SE income, your SE tax is about $8,478 — and you deduct $4,239, saving roughly $930–$1,020 in income tax depending on your bracket. This deduction is automatic when you file — just make sure your tax software calculates it.
Self-employed retirement plans offer the best dollar-for-dollar tax reduction available. A SEP IRA lets you contribute up to 25% of net self-employment earnings (max $70,000 for 2025). A Solo 401(k) lets you contribute as both employee ($23,500 in 2025) and employer (25% of net), potentially reaching the same cap. For a full comparison with real numbers at every income level, see our Solo 401(k) vs SEP IRA guide.
Computers, software, office furniture, tools, supplies — anything ordinary and necessary for your business. Items under $2,500 can be expensed immediately under the de minimis safe harbor. Larger purchases can be fully deducted in the year of purchase using Section 179 (up to $1,250,000 for 2025) or bonus depreciation. For most freelancers, this means your new laptop, monitor, desk, and software subscriptions are fully deductible the year you buy them.
If you use your personal phone and internet for business, deduct the business-use percentage. A $70/month phone plan used 60% for business = $504/year. A $80/month internet bill used 50% for business = $480/year. Be honest about the split — the IRS is skeptical of 100% business use for a personal phone.
Accountant fees, tax preparation, legal consultations, bookkeeping services, financial planning related to your business — all fully deductible. If your accountant charges $500 to prepare your Schedule C, that's a $500 deduction next year. Attorney fees for business contracts, trademark registration, or business formation are deductible in the year paid.
Adobe Creative Cloud, QuickBooks, Slack, Zoom, project management tools, domain hosting, cloud storage, email marketing platforms — any subscription used for business is deductible. If a subscription is partially personal (like Spotify used for focus music), deduct only the business-use percentage.
Courses, workshops, conferences, books, and certifications that maintain or improve skills required in your current business are deductible. A web developer taking an advanced React course: deductible. A freelance writer attending a journalism conference: deductible. Key rule: the education must relate to your existing business — training for a completely new career does not qualify.
Travel expenses (airfare, hotel, rental car, rideshare) for business purposes are fully deductible. Business meals — meals with clients, prospects, or business partners where business is discussed — are 50% deductible. The meal must not be lavish or extravagant, and you must document who you ate with, the business purpose, and the amount.
Website costs, domain registration, Facebook/Google ads, business cards, portfolio hosting, SEO tools, email marketing software, branded merchandise — all deductible. If you pay for sponsored posts, influencer collaborations, or print advertising, those costs are deductible in the year paid.
Professional liability (errors & omissions), general liability, business property insurance, cyber liability, and any other insurance specifically for your business. Note: this is separate from the health insurance deduction above — business insurance goes on Schedule C while health insurance goes on Form 1040.
The QBI deduction: an extra 20% most freelancers miss
The Qualified Business Income (QBI) deduction under Section 199A lets eligible self-employed individuals deduct up to 20% of their qualified business income. This is in addition to all the deductions listed above.
For sole proprietors with taxable income below $191,950 (single) or $383,900 (married filing jointly) in 2025, the deduction is straightforward: 20% of your net Schedule C income. Above those thresholds, limitations based on W-2 wages paid and property owned phase in — but most solo freelancers fall below the limit.
| Net Schedule C income | QBI deduction (20%) | Tax savings (22% bracket) |
|---|---|---|
| $40,000 | $8,000 | $1,760 |
| $60,000 | $12,000 | $2,640 |
| $80,000 | $16,000 | $3,520 |
| $100,000 | $20,000 | $4,400 |
The QBI deduction is calculated on your Form 1040, not Schedule C. It reduces income tax but does not reduce self-employment tax. Some specified service trades or businesses (law, health, consulting, financial services) face additional limitations above the income thresholds — but again, below the threshold, the full 20% applies regardless of your profession.
Platform-specific deduction guides
Different gig platforms have different deductible expenses. We've built detailed guides for the most common:
- Uber and Lyft driver deductions — mileage, phone, amenities, platform fees
- Instacart shopper deductions — mileage, insulated bags, phone
- Amazon Flex driver deductions — mileage, phone, equipment
Record-keeping rules
The IRS requires adequate records — receipts, invoices, mileage logs, and bank/credit card statements that substantiate every deduction. The standard: if audited, could you prove each expense was real and business-related?
For expenses under $75, the IRS does not require a receipt (though it's still smart to keep one). For travel, meals, and entertainment, you need documentation of the amount, date, place, business purpose, and business relationship of the person involved. For vehicle expenses, a contemporaneous mileage log is required — not reconstructed from memory at year's end.
Use an app like QuickBooks Self-Employed, FreshBooks, or Wave (free) to photograph receipts and categorize expenses in real time. The 10 minutes per week this takes will save hours at tax time and thousands in missed deductions.