- Keep detailed records of business expenses
- Maximize home office deductions
- Take advantage of technology and software deductions
- Utilize retirement account contributions
- Consider health insurance and medical expenses
Keep detailed records of business expenses
Freelancers should maintain meticulous records of all business-related expenses, including receipts and invoices. This can include expenses such as office supplies, travel, and professional development.
Maximize home office deductions
Freelancers who work from home can take advantage of home office deductions, including a portion of rent or mortgage, utilities, and internet costs. It's important to accurately calculate the square footage of the home office space.
Take advantage of technology and software deductions
Freelancers who rely on technology and software for their work can deduct the costs associated with these tools, such as computers, software subscriptions, and other necessary equipment.
Utilize retirement account contributions
Contributing to a retirement account, such as a SEP IRA or Solo 401(k), not only helps save for the future but also provides tax benefits for freelancers.
Consider health insurance and medical expenses
Freelancers can deduct health insurance premiums and out-of-pocket medical expenses, potentially including dental and vision care, as long as they meet certain criteria. It's important to consult with a tax professional to ensure compliance with IRS regulations.