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What self-employed expenses can I deduct?

SOLVEDby TurboTax4705Updated 1 month ago

If it's directly related to the work you do, you can deduct it as an expense. See the following section for a list of common expenses most self-employed taxpayers will want to review.

Work-related expenses reduce your taxes by lowering the amount of self-employment income you get taxed on. For example, if you made $50,000 in self-employment income and had $5,000 out-of-pocket expenses, you'd only get taxed on $45,000.

For state-specific questions regarding your work, contact your state’s Department of Revenue.

We also have instructions for entering your self-employment expenses in TurboTax.

  • Communication costs, for example mobile phones, data plans, internet or wireless services, land or fax lines, long-distance charges, voicemail or answering services, call waiting, etc.
    • If also used for personal reasons (for example, mobile phones and internet service), then only the proportion used in business is allowed as an expense
  • Office supplies (paper, toner, writing instruments, etc.), software, stamps, envelopes, shipping materials, cleaning supplies
  • Any licenses or permits that are required for your profession
  • Fees and membership dues you paid to professional associations or unions
  • Continuing education or certification related to your work
  • Mileage accumulated during the course of your work
    • However, regularly commuting to and from a fixed office wouldn't qualify
  • Advertising costs, including business cards and websites
  • Fees for attorneys, consultants, accountants, and other professionals
  • Liability insurance, errors and omissions insurance, and surety bonds
  • Credit card and bank fees
  • Health care premiums

Examples of industry-specific expenses for common self-employed professions.

As an Uber, Lyft, or other self-employed driver, you can deduct these work-related expenses in addition to the ones listed in the common expenses section:

  • Business use portion of mobile phones, data plans, and mobile phone accessories (chargers, cradles, and mounts)
  • Vehicle expenses or standard mileage
  • Car wash, cleaning, and detailing
  • Licenses, permits, and emissions testing
  • Customer refreshments (bottled water, mints, snacks, and gum)
  • Commissions paid or deducted from income (Uber and Lyft split fare)
  • Miscellaneous fees (tolls, parking, roadside assistance, city and airport fees, etc.)

These out-of-pocket expenses will offset (reduce) your earnings, lowering the amount of income you pay taxes on.

As for the car itself, you can deduct fuel, maintenance, repairs, auto insurance, registration, lease payments, and depreciation. Many drivers opt to do this through the Standard Mileage Rate (65.5 cents per mile beginning January 1, 2023), because it's much simpler. However, you can deduct each expense individually with the alternative Actual Expenses method. Both methods require you to keep track of your business and personal miles.

Here are more resources:

In addition to the expenses listed in the common expenses section, you might have these expenses while working as a consultant:

  • Office supplies and computer software (tax prep fees)
  • Business portion of mobile phones, data plans, or a second phone line
  • Advertising, including websites
  • Work-related education
  • Licenses and legal or professional membership dues
  • Vehicle expenses or standard mileage
  • Travel expenses such as airfare, auto rental, and lodging
  • Business meals with clients (100% of the total expenses for restaurant meals from January 1, 2021, through December 31, 2022)

These out-of-pocket expenses will offset (reduce) your earnings, lowering the amount of income you pay taxes on.

If you're a self-employed salesperson, here are some expenses you can deduct, in addition to those in the common expenses section:

  • Sales kits, presentation materials, and free samples
  • Booth rental fees at malls, farmer's markets, craft fairs, trade shows, etc.
  • Inventory storage space
  • Advertising, including websites
  • Office supplies, shipping, and postage
  • Business portion of mobile phones, data plans, or a second phone line
  • Travel expenses such as airfare, auto rental, and lodging
  • Business meals with clients (100% of the total expenses for restaurant meals from January 1, 2021, through December 31, 2022)

These out-of-pocket expenses will offset (reduce) your earnings, lowering the amount of income you pay taxes on.

In addition to the expenses listed in the common expenses section, self-employed real estate agents can also deduct things like:

  • Broker, lockbox, and MLS fees
  • Advertising, including websites (signage, open house refreshments)
  • Business insurance (liability, errors and omissions, etc.)
  • Fees for licenses and renewals, professional association fees, and membership dues
  • Work-related education
  • Business portion of mobile phones, data plans, or a second phone line
  • Vehicle expenses or standard mileage

These out-of-pocket expenses will offset (reduce) your earnings, lowering the amount of income you pay taxes on.

As a self-employed construction worker, contractor, handyman, or landscaper, here are some expenses you can deduct, in addition to those listed in the common expenses section:

  • Equipment such as garden tools, wheelbarrows, lawn mowers, and trailers
  • Supplies (sprinkler heads, herbicides, fertilizer, etc.)
  • Specialized protective clothing like masks, safety glasses/shoes/boots, and work gloves
  • Vehicle expenses or standard mileage
  • Advertising, including websites
  • Work-related education or training
  • Licenses and permits
  • Liability and other insurance
  • Business portion of mobile phones, data plans, or a second phone line

These out-of-pocket expenses will offset (reduce) your earnings, lowering the amount of income you pay taxes on.

As a self-employed caretaker, babysitter, or nanny, here are some expenses you can deduct, in addition to those listed in the common expenses section:

  • CPR certification and first aid training
  • Miscellaneous supplies such as diapers, food, toys, and books
  • Liability insurance
  • Advertising, including websites
  • Business portion of mobile phones, data plans, or a second phone line
  • Vehicle expenses or standard mileage
  • Work-related education or training
  • Licenses and permits, and membership dues
  • Fees for legal or professional services (childcare only)

You can't write off these expenses if you're not self-employed — for example, if you're a household employee who was hired through an agency.

These out-of-pocket expenses will offset (reduce) your earnings, lowering the amount of income you pay taxes on.

Self-employed healthcare service providers like acupuncturists, chiropractors, dentists, and physicians can deduct the following expenses along with those mentioned in the common expenses section:

  • Specialized equipment, supplies, and tools such as examination tables and acupuncture needles
  • Uniforms otherwise unsuitable for everyday wear
  • Refreshments and reading material for your clients
  • Office or booth rental
  • Advertising, including websites
  • Licenses, permits, renewal fees, and membership dues
  • Liability, malpractice, or other business insurance
  • Business portion of mobile phones, data plans, or a second phone line
  • Vehicle expenses or standard mileage
  • Work-related education or training

These out-of-pocket expenses will offset (reduce) your earnings, lowering the amount of income you pay taxes on.

Self-employed hair stylists, beauticians, and barbers can deduct the following expenses along with those mentioned in the common expenses section:

  • Salon or booth rental
  • Supplies such as shampoo, hair products, combs, towels, nail products, etc.
  • Tools (scissors, hair dryers, curling irons, razors), including scissor and tool sharpening
  • Uniforms otherwise unsuitable for everyday wear, and the laundry and cleaning services for them
  • Refreshments, Wi-Fi, and reading material for your clients
  • Advertising, including websites
  • Licenses, membership dues
  • Work-related education or training
  • Business portion of mobile phones, data plans, or a second phone line

These out-of-pocket expenses will offset (reduce) your earnings, lowering the amount of income you pay taxes on.

If you're a self-employed writer, artist, or performer, you can write off these expenses in addition to the ones listed in the common expenses section:

  • Equipment, like musical instruments, easels, recorders, and stage props
  • Supplies such as canvas, paint, and stage makeup
  • Costumes (if unsuitable for everyday wear)
  • Books, magazines, or other reference materials used in your work
  • Advertising, including websites
  • Agent commissions
  • Business portion of mobile phones, data plans, or a second phone line
  • Vehicle expenses or standard mileage
  • Travel expenses such as airfare, auto rental, and lodging

These out-of-pocket expenses will offset (reduce) your earnings, lowering the amount of income you pay taxes on.

As a self-employed coach, umpire, or referee, here are some additional expenses you can deduct:

  • Tools, supplies, and equipment (whistles, balls, cones, first aid kit, clipboard, etc.)
  • Uniforms or gear not suitable for everyday wear, such as helmets, masks, skates, and chest protectors
  • CPR certification and first aid training
  • Coach’s clinics, workshops, and specialized training
  • Travel expenses such as airfare, auto rental, and lodging (plus meals, if you have to be away overnight)
  • Business portion of mobile phones, data plans, or a second phone line
  • Vehicle expenses or standard mileage
  • Advertising, including websites
  • Licenses, permits, fees, and membership dues

These out-of-pocket expenses will offset (reduce) your earnings, lowering the amount of income you pay taxes on.

Self-employed notaries, attorneys, or other legal services can deduct the following expenses along with those mentioned in the common expenses section:

  • Office supplies, notary journals, and stamps
  • Copying and printing fees
  • Advertising, including websites
  • Notary insurance (E&O, surety bonds)
  • Licenses, permits, renewal fees, and membership dues
  • Work-related education or training
  • Business portion of mobile phones, data plans, or a second phone line
  • Vehicle expenses or standard mileage
  • Fees for legal or professional services

These out-of-pocket expenses will offset (reduce) your earnings, lowering the amount of income you pay taxes on.

Self-employed dietitians, nutritionists, and masseuses may deduct the following expenses along with those mentioned in the common expenses section:

  • Specialized equipment and supplies such as massage tables, scales, towels, massage oils, and refreshments
  • Uniforms otherwise unsuitable for everyday wear
  • Advertising, including websites
  • Office or booth rental
  • Licenses, permits, renewal fees, and membership dues
  • Liability, malpractice, or other business insurance
  • Work-related education or training
  • Business portion of mobile phones, data plans, or a second phone line
  • Vehicle expenses or standard mileage

These out-of-pocket expenses will offset (reduce) your earnings, lowering the amount of income you pay taxes on.

Self-employed physical/occupational therapists, speech therapists, and audiologists may deduct the following expenses along with those mentioned in the common expenses section:

  • Specialized equipment, supplies, and tools such as speech cards, exercise bikes, audiometers, therapy bands, etc.
  • Uniforms otherwise unsuitable for everyday wear
  • Liability, malpractice, or other business insurance
  • Licenses, permits, renewal fees, and membership dues
  • Work-related education or training
  • Business portion of mobile phones, data plans, or a second phone line
  • Vehicle expenses or standard mileage
  • Advertising, including websites

These out-of-pocket expenses will offset (reduce) your earnings, lowering the amount of income you pay taxes on.

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