Tuesday, February 5, 2019
Top 10 freelance tax deductions for 2019 (U.S.)
It's a new year and, not only does this spell exciting new horizons for your career, there are also new tax rules at play thanks to 2018 tax reform. While the Tax Cuts and Jobs Act set forth the biggest changes to the tax code in over 30 years, there are still numerous deductions available that freelance designers and developers have historically overlooked.*
1. Taking clients and colleagues out for lunch and coffee
After the 2018 tax reform, business entertainment, amusement, and recreation are no longer deductible. However, business-related meals treating clients and meals purchased on business trips are still deductible at 50% of their total cost.
2. Computers, phones, and other equipment
Because tech is so necessary to how most people make a living today, the new tax law lifted the onerous documentation requirements on computers, smartphones, and related accessories. You still need to allocate personal and business use if you don't have separate devices, but don’t need to extensively document it.
3. Business travel expenses and mileage
Going to conferences and being on location for multiple gigs can add up. Fortunately, you have a sizeable deduction at your disposal. Flights, cabs and rideshare, and lodging are all deductible. Even if you use your own car, you can deduct $0.545/mile or the actual costs of maintaining your car, whichever is more beneficial.
4. Credit card interest if you financed eligible business expenses this way
You can't deduct your personal credit card interest. But if you have a separate credit card for business expenses, or if you calculate how much of your balance is attributable to business expenses, you can write off the finance charges.
5. The cost of co-working space
Co-working space is a valuable way to build a creative network and create a work-life separation. Whether you're getting consistent passes or renting a private office, you can deduct the rent you pay.
6. Your home office
If you choose to work at home, there are specific rules you need to meet for deducting a portion of your rent and utilities. Namely, the space needs to be exclusive and regular. This means that buying a co-working weekly pass or two won't affect the deduction but a long-term agreement could nullify it.
7. Subscriptions, books, and other professional research
Magazines, books, e-learning courses, and other resources you use for source material or to help your professional development are a deductible research expense that’s frequently overlooked.
8. Investing in your career with workshops and further education
Self-employed people have an easier time when it comes to tax benefits for education. Whether you're attending a small workshop or going back to an accredited university for a course or certificate, education is an investment that equates to a deduction you shouldn't miss.
9. Attorneys, accountants, and other professional fees
Professionals like lawyers, accountants, and business consultants help keep your business operations running smoothly so you can focus on providing excellent service to your clients. Whether you need burning questions answered or help going after unpaid invoices, the professional fees that you pay throughout the year are deductible.
10. Promoting yourself
Everyone entrepreneur needs to market themselves. Business cards, swag and other promotional goods, Facebook ads, and even event marketing are all deductible.
With tax laws constantly changing, it's important to stay on top of which deductions you're eligible for each year. QuickBooks Self-Employed can simplify your tax record keeping by providing a suite of tools, including mileage tracking, invoicing, and more.
*This information does not constitute, and should not be considered a substitute for, legal or financial advice. Each financial situation is different. The information provided is intended to be general. Please contact your financial or legal advisors for information specific to your situation.
**This information is based on United States taxes.