What Expenses Can I Deduct as a Freelancer? Complete Guide

As a freelancer, your biggest tax advantage is the ability to deduct business expenses. Every dollar you deduct reduces your net profit, which directly lowers both your income tax and your 15.3% self-employment tax.

The IRS rule is that an expense must be "ordinary and necessary" for your line of work to be deductible. Here is the ultimate checklist of what you can (and cannot) write off in 2026.

1. The Home Office Deduction

If you use a portion of your home exclusively and regularly for your freelance business, you can deduct a percentage of your housing costs. This includes rent, mortgage interest, property taxes, utilities (electricity, water, gas), and homeowners/renters insurance.

How to calculate it: If your home is 1,000 square feet, and your dedicated office room is 100 square feet, you can deduct 10% of all the expenses listed above. (Alternatively, you can use the IRS Simplified Method, which is a flat $5 per square foot of office space, up to 300 sq ft).

2. Software and Subscriptions

In the digital age, software is the equivalent of office supplies. You can deduct 100% of the cost of:

• Adobe Creative Cloud, Microsoft Office, Google Workspace
• Web hosting, domain names, and website builders (Squarespace, Shopify)
• Bookkeeping and invoicing software
• Project management tools (Asana, Trello, Notion)
• Cloud storage (Dropbox, Google Drive)

3. Internet and Cell Phone

You cannot deduct your entire internet and cell phone bill if you also use them for personal reasons (like streaming Netflix or calling your mom). You must calculate the business-use percentage. If you use your cell phone 50% of the time for client calls and emails, you can deduct 50% of the bill.

4. Advertising and Marketing

Any money spent to acquire clients is fully deductible. This includes:

• Facebook, Instagram, and Google Ads
• Business cards and printed flyers
• Paying a graphic designer to create your logo
• Sponsorships or networking group membership fees

5. Business Travel and Mileage

If you drive to a client's office, a conference, or a coffee shop to work, those miles are deductible at the IRS standard mileage rate (projected around 68-70 cents per mile for 2026). Your daily commute from your bed to your home office is not deductible.

If you fly to another city for a conference or client meeting, you can deduct the airfare, hotel, Uber rides, and 50% of the cost of your meals while traveling.

6. Contract Labor

Did you hire a freelance developer to help you finish a big project? Or a virtual assistant to manage your inbox? The money you pay to other freelancers is a deductible expense. (Just remember, if you pay them more than $600 in a year, you must issue them a 1099-NEC).

7. Health Insurance Premiums

If you buy your own health, dental, or qualifying long-term care insurance, you can deduct 100% of the premiums for yourself, your spouse, and your dependents. This is an "above-the-line" deduction on your Form 1040.

What You CANNOT Deduct

The IRS is very strict about personal expenses masquerading as business deductions. You cannot deduct:

• Everyday clothing: Even if you bought a suit specifically for a client meeting, it is not deductible because it is suitable for everyday wear.
• Commuting costs: Driving from your home to a permanent W-2 office is never deductible.
• Fines and penalties: Parking tickets, speeding tickets, or IRS late fees are not deductible.