TAX DEDUCTIONS FOR FREELANCE CONSULTANTS

Whether you’re new to entrepreneurship or you’ve owned your own business for years, see what you can write off as a freelance coach or consultant.

Optimize your tax savings

Keep more of your hard-earned money

Owning your own business comes with plenty of perks. You define your own hours, can be selective when choosing clients, and have the benefit of knowing you’re getting out exactly what you’re putting in in effort.

But working for yourself can come with a learning curve, especially if you’re more accustomed to the 9-to-5 lifestyle.

As an employee, you probably received a yearly W-2 showing how much money you earned and how much was withheld in taxes. You didn’t have to think about things like Schedule C (AKA “Profit or Loss from Business as a Sole Proprietor”) or keeping track of business deductions. You might be feeling overwhelmed by the stress of trying to figure out your taxes all on your own.

Here at Tax Savvy Advisors we have more than 13 years of experience helping freelance coaches and consultants navigate the confusing world of taxes.

We want to encourage you to take a deep breath and relax. Taxes can feel overwhelming, but they don’t have to.

Below we list tax write-offs for freelance coaches and consultants so you can understand which expenses are deductible and which aren’t.

Get ready to optimize your tax savings and keep more of your hard-earned money!

 

 

 

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General Expenses

Regardless of your specific gig, these expenses are generally deductible when they are used to carry out your trade or business.

Bank Fees
Banks are notorious for sneaky add-on fees for maintenance, monthly statements, and certain transactions. Luckily, you can write these (and any other bank fees) off.
Business Meetings
Meetings are always more fun with refreshments, so bring on the coffee and danishes. Business meeting expenses are deductible.
Childcare
Balancing work and family is tough. Childcare costs aren’t eligible to be deducted from your business income, but thankfully, you can get a break with the Dependent Care Tax Credit which allows a maximum of 35% of eligible childcare expenses to be deducted.
Employees
Wages and salary paid to your employees are deductible expenses.
Insurance
Premiums paid toward policies that benefit your business are typically deductible. This includes liability, property, workers’ compensation, and business income insurances.
Legal & Professional Services
If you consult with a lawyer, accountant, bookkeeping, or other professional to keep your business running, you can deduct the cost of these services.
Loan Interest
Any interest paid on business loans is deductible. This includes interest from bank loans, property loans, and credit cards.
Subcontractors
Money paid out to subcontractors qualifies as a tax deductible expense. You’ll need to request a W-9 from your subcontractors so you can provide them with a form 1099.
Vehicle
Do you use your vehicle for business purposes? You can deduct a percentage of your vehicle ownership and maintenance. If your vehicle is used 100% for your business, you can deduct the entire cost of ownership and maintenance.
Continuing Education
Education undertaken to improve the skills needed in your current profession are deductible. However, education undertaken to qualify you for another job is not.

For example, an MBA could be a business deduction since it would enhance the skills already obtained. On the other hand, a hair stylist who decides to become a certified Life Coach can’t write-off the cost of the certification course.

Home Office

Do you use your home office exclusively for business? You may be eligible for the home office deduction.

To qualify, you must meet IRS criteria for “exclusive use.” Here are some examples of the exclusive use requirement:

N

You use part of your home as your principal place of business on a regular basis.

N

You use part of your home to meet with clients and/or customers in the normal course of running your business.

N

You have a separate structure that’s not attached to your home that you regularly use in connection with your business.

N

You use part of your home to regularly store products and inventory for purposes of being sold.

You can’t deduct business expenses for any part of your home that you use for both business and personal purposes. So if your home office is also used as a guest room or for storage of personal items, you don’t meet the “exclusive use” requirement.”

Home Office Expenses

Office Space

If you have a home office exclusively used for business purposes, you may qualify to deduct a portion of the expenses for maintaining your home.

The IRS allows two methods when figuring the deduction for your home office.

  • Actual Method
    You’ll need to determine the percentage for the square footage of your home office compared to the total square footage of your home and complete Form 8829 when filing your income tax return to claim the deduction. The deduction is equal to the percentage of your home office compared to the total costs to maintain your home.
  • Simplified Method
    A deduction of $5/square foot of your home office, up to 300 square feet can be used to calculate the deduction using this method. The maximum deduction is $1,500.
Office Supplies
Have you been eyeing that adorable rose gold and pink stapler for months? Go for it! Office supplies such as paper, ink, folders, pens, and (yay!) staplers are deductible.
Website Costs
A professional website is a must in today’s business world. Luckily, you can deduct site expenses including design, hosting, and maintenance costs.
Standing Desk
Trying to improve your health without losing time on the job? A standing desk is an excellent way to do so and is an acceptable tax deduction.
New Devices
If you use a business computer, tablet, or laptop valued at $2,500 or less, you can elect to deduct 100% of the purchase cost in a single year, or you can choose to take a depreciation deduction over the lifetime of your device.
Cleaning Fees & Supplies
Do you hire a service to clean your home, including your home office? You can deduct the appropriate percentage of this cost.
Subscription Services
Do you use CRM services like Dubsado or Asana to manage projects and communicate with clients? These qualify as deductions.
Coffee
If you’re serving coffee to clients or staff, it’s a write-off. But if you’re sipping your Nespresso while working alone in your home office? No. Sorry.
Furniture
You can elect to deduct 100% of the purchase cost of office furniture in a single year, or you can choose to take a depreciation deduction over the furniture’s lifetime. Some expenses may be eligible for accelerated depreciation.
Taxes & Insurance
Real estate taxes, mortgage interest, and insurance costs are partially deductible.

BONUS: Did you know you can claim the home office tax deduction regardless of what type of home you reside in? A traditional home, an apartment, and even a houseboat qualify!

Auto

If you use your car in your business, you can deduct your car expenses.

You’ll need to maintain a mileage log that includes a record of your miles driven, the corresponding dates for business trips, the locations of where you drove for business, and the business purpose. It is recommended that you use a mileage tracking app like MileIQ. Check it out at mileiq.com

The IRS allows two methods when figuring the deduction for your auto expenses.

  • Actual Method

The deduction is equal to the percentage of your business miles when compared to your total miles for your gas, oil changes, repairs & maintenance, depreciation, etc.

  • Standard Mileage Rate

The deduction is equal to the total business miles times the standard mileage rate. The standard mileage rate is 0.70/mile for 2025.

Auto Expenses

Auto Lease Payments

Use a mileage log to track your business miles. Calculate your percentage of business use to determine how much of your monthly payment is tax deductible.

Auto Loan Interest

Use a mileage log to track your business miles. Calculate your percentage of business use to determine what percentage of your loan interest is tax deductible.

Insurance

Your car insurance premium is tax deductible. Make sure you keep excellent records that demonstrate business use of your vehicle.

Repairs and Maintenance

Oil changes, repairs, tires, air filter replacement, and other general car maintenance tasks are tax deductible.

Fuel

With the high cost of fuel causing financial stress for most people, you’ll be glad to know that the cost of your fuel is tax deductible.

Rental Cars

Do you need to rent a car during a business trip? Rental cars are tax deductible when used specially for business travel.

BONUS: The average taxpayer loses 13 hours and overpays by $2,000 when DIY-ing their income tax return compared to taxpayers who seek professional help.

Travel

You can deduct travel expenses paid in connection with a temporary work assignment away from your tax home (the city where your main place of business is located).

This includes travel expenses for conventions, conferences, and seminars so long that you can show your attendance benefits your business.

You’ll need to keep records for the number of days work was performed. For travel within the US, the majority of your time of your trip should be spent doing business. If you travel outside the US, you 25% of your time is required to be spent doing business.

Travel Expenses

Accommodations

If your business travel requires you to be away from your home overnight your hotel costs are deductible.

Auto Transportation

Rideshare fees and rental car costs necessary during your business travel are deductible.

Food & Drinks

Unlike the 50% deduction limitation on meals when meeting with clients, food and drink consumed while traveling away from your home for business travel are 100% deductible. You may benefit from taking a deduction for the per diem rates for meals while away for business.

Networking & Education

Travel expenses for conventions, conferences, and seminars are deductible. Just make sure you can prove how they benefit your business.

Baggage Fees

There’s nothing worse than getting nickeled and dimed by an airline. Thankfully, those pesky checked bag fees are tax deductible.

Air Travel

You can deduct 100% of the cost of a plane ticket purchased to get you to your business trip destination.

BEWARE of mixing business with pleasure! If your family is traveling with you, your deduction may be limited to the portion of the travel expenses allocated to you.

Medical Deductions

Medical expenses can be a significant financial burden for self-employed individuals. The good news… the IRS allows for medical expenses to be deducted on your income tax return.

Medical Deductions

Health Insurance Premiums

Self-employed individuals can take a deduction equal to 100% of their health insurance premiums including qualifying long-term care coverage, all Medicare premiums, or health plans purchased through your state’s marketplace exchange so long that you’re not eligible for health insurance via an employer (or your spouse’s employer).

Health Savings Account (HSA)

If you have an eligible high deductible health plan an HSA is a great way to deduct your out-of-pocket medical expenses. The annual tax-deductible contribution limit is $4,300 for individual coverage and $8,550 for family coverage in 2025.

Retirement Planning

Contributing to a retirement account is a great way to slash your tax bill. There are several options available if you’re self-employed.

Retirement Planning

Traditional IRA

An easy to establish plan that is the perfect fit for new business owners earning $100k or less. Tax-deductible contribution limits are $7,000/year for taxpayers under 50 years old effective for 2025. SIMPLE IRA A SIMPLE IRA is a step above a Traditional IRA with an increased tax- deductible contribution limit of up to $16.500/year for taxpayers under 50 years old effective for 2025.

SEP IRA

A SEP IRA allows self-employed business owners to make a tax-deductible contribution up to $70,000/year for taxpayers under 50 years old effective for 2025.

BONUS: Retirement planning is one part of your total wealth plan. Speak with your financial advisor to select the best retirement plan to meet your needs.

Not-Deductible Expenses

There are exceptions to every rule, including what expenses you’re allowed to deduct…these are expenses the IRS has ruled are not-deductible

Not-Deductible Expenses

COMMUTING MILEAGE

including travel to/ from your home to/ from your primary place of business.

ENTERTAINMENT EXPENSES

including memberships to social clubs.

L&D INSURANCE PREMIUMS

paid for yourself if you’re taxed as a sole proprietor, partnership, or S-Corporation.

PENALTIES & FINES

including late tax payment penalties and parking tickets.

PERSONAL BENEFIT EXPENSES

including business clothing that doubles as street or evening wear, hair & nail services, gym memberships, etc.

SALARY OR WAGES

paid to yourself if you’re taxed as a sole proprietor or LLC taxed as a disregarded entity or partnership.

YOUR TIME

whether it’s “donated” or for an unpaid invoice for service for cash-basis taxpayers.

Frequently Asked Questions

What exactly is a tax deductible business expense?

Any expense that is both ordinary and necessary that is incurred in the process of running a business.

I’m a yoga teacher and need to buy lululemon yoga pants for my business. Can I deduct them?

No. Clothing deducted for business must be required for your employment and cannot be acceptable for daily wear. For example, nurse scrubs are deductible, but yoga pants aren’t. Why? Because athleisure wear is commonly worn in public for everyday activities. If nobody is going to give you “side eye” for your outfit in public, then it’s probably not tax deductible.

Stop stressing about your tax write-offs

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