How I Stopped Leaving Money on the Table

Look, every buck you write off stays in your pocket. Everyone knows that. Yet I watch freelancers leave thousands behind every single year. They either have no clue what qualifies or they just... don't track stuff.

Guilty as charged. My first two years? I threw my laptop on the Schedule C and figured that was enough. Then I sat down with this CPA who works exclusively with self-employed folks. Pretty sure she needed a minute to recover after looking at my return.

So here's what I've picked up since then.

Fair warning though. I'm not your accountant. Rules shift constantly. Your situation probably looks nothing like mine. Talk to somebody who actually knows your numbers before making moves.

That Confusing Home Office Thing

People overthink this one. They've heard scary audit stories so they just skip it entirely. Totally fair game though — you just gotta do it correctly.

The Two Requirements

First one — you actually work there consistently. Not whenever you remember.

Second — nothing else happens in that spot. Your guest bedroom where Aunt Linda crashes twice a year? Nope. That desk shoved in the corner that nobody touches except you? Yep, that works.

Having a whole separate room makes things cleaner. A dedicated corner you can point to works fine though.

Calculating What You Get Back

Option A keeps things stupid simple. Five bucks for every square foot you use, capping at 300 feet. Tops out at fifteen hundred dollars. Quick math, barely any paperwork.

Option B takes more effort. What chunk of your place serves as workspace? Take your office square footage and divide by the whole home. Whatever percentage you land on, apply that to rent, power bills, insurance, repairs — the actual costs.

Personally I crunch both versions each spring and grab the bigger number.

Expenses That Qualify With Option B

Mortgage interest works. Just the interest piece, skip the principal. Property taxes make the list. Your electric and gas and water bills, plus internet obviously. Homeowner's insurance counts. Any repairs or upkeep you've done. And if you own the place, you can factor in depreciation too.

Your Gear and Tech Stuff

Pretty much anything you need for the actual work gets written off.

Computer Hardware

Your laptop or desktop obviously. Monitors — including that travel one I haul around. Tablets and phones qualify partially based on how much you actually use them for work. Backup drives and storage. Printing equipment and scanners and cameras for video calls.

Where You Park Yourself

That standing desk setup. A decent chair — my spine would file a complaint otherwise. File storage if you still deal with paper. Proper lighting matters more than people realize, especially when you're staring at screens all day.

See our complete guide to deducting home office furniture.

The Little Accessories

Keyboards and pointing devices. Headsets and mics for calls. External webcams beyond the garbage built into laptops. Bags for carrying your stuff. Every cable and dongle you've accumulated.

Deducting Big Purchases All at Once vs Slowly

For anything north of twenty-five hundred bucks, you've got choices.

Section 179 basically says write the whole thing off this year. The ceiling sits around 1.16 million for 2024 according to the IRS — pretty sure that covers your monitor purchase.

Or spread it across five to seven years through standard depreciation.

I almost always take the immediate hit. Getting money back now beats waiting around.

All Those Monthly Services

If you're paying for it regularly, it probably qualifies.

Work-Related Apps

Project trackers and planning tools. Whatever you use to log hours. Bookkeeping platforms like QuickBooks or FreshBooks. Billing and invoice generators. Note-taking subscriptions like Notion or Obsidian.

Staying Connected

Video call services — the paid Zoom tiers. Team messaging like the premium Slack plans. Newsletter and email tools. VPN access for working securely on weird networks.

Stuff Specific to What You Do

Creative software packages like Adobe or Figma. Developer platforms and code hosting. Writing assistants and grammar checkers. Marketing and SEO research tools.

Files in the Cloud

Business versions of the big productivity suites like Google Workspace or Microsoft 365. Online storage through various providers like Dropbox or iCloud. Hosting for your website. Domain renewals every year.

Getting Around for Work

Here's the deal — trips that count as business travel get written off. Vacation vibes don't qualify no matter how much you check email.

What Actually Qualifies

Heading somewhere to meet clients or chase leads. Attending conferences in your field. Courses and training sessions you travel for. Temporary gigs that pull you away from home base.

What Definitely Doesn't

Bouncing between cities because you got restless and wanted a change of scenery. Doesn't matter that you kept working from Lisbon cafes. Trust me, I had this argument with my CPA already. Lifestyle choices aren't business expenses.

The Actual Travel Costs

Plane tickets and train fares and bus rides. Accommodations wherever you're staying. Rental vehicles and rideshares when they're for work purposes. Half of what you spend on food during the trip. Gratuities add up too. Checked bag fees. Coverage for the journey itself.

Driving Your Own Car

When your personal vehicle does business duty:

You can log miles at sixty-seven cents each for 2024 per the IRS. Every single business trip needs tracking.

Or tally up the real numbers — fuel, coverage, maintenance, wear on the vehicle — then figure what percentage came from work trips.

Downloaded MileIQ after about two weeks of failing miserably at manual logging.

Learning and Growing

Putting cash toward skills you need? Write it off.

Courses and Credentials

Classes and programs tied to what you actually do. Professional certificates and licenses. Online courses that sharpen your edge. Sign-up costs for conferences plus the travel and room. Intensive workshops in your area. Sessions with coaches or consultants.

One wrinkle though — needs to sharpen or refresh abilities for your existing gig. Pursuing a law degree while running a design business won't fly.

Professional Memberships

Dues for industry associations. Subscriptions to trade publications. Belonging to relevant organizations. Fees for networking communities.

Staying Informed

Books related to your work. Database and research subscriptions. Reports and analysis from your sector.

Covering Your Health

This one hits different. Probably the single biggest write-off available to people like us.

What Gets Deducted

Monthly premiums covering yourself and your family. Dental plans. Vision coverage. Long-term care policies have some restrictions based on age but generally work.

Making Sure You're Eligible

You turned a profit from your self-employed work. Nobody else offered you coverage — not even through a spouse's job. Medicare wasn't in the picture either.

Why This Matters So Much

Slices directly off your AGI. That happens before tons of other calculations kick in. Smaller AGI leads to smaller tax bills, potentially unlocks other benefits, and chops down self-employment taxes too.

Paying twelve grand annually on health coverage? This single deduction shaves somewhere between twenty-six hundred and forty-four hundred off your liability. Where you land depends on your tax bracket.

Stashing Money for Later

These pull double duty — lowering what you owe now while growing wealth for down the road. See our complete guide to retirement savings for freelancers.

The Solo 401k Route

Employee portion maxes at twenty-three thousand per IRS limits. Then you add another chunk as the "employer" — up to a quarter of your net self-employment earnings. Combined ceiling hits sixty-nine grand for 2024. Works great when you're earning well and flying without employees.

Going the SEP IRA Path

Cap sits at twenty-five percent of net earnings. Same sixty-nine thousand dollar maximum. Setup takes almost no effort. Actually works even when you've brought on staff.

Old School Traditional IRA

Seven thousand dollar limit with an extra thousand if you've hit fifty. Fully deductible when you've got no employer plan in the mix. Stack this on top of the other options if you want.

Running the Numbers

Stashing fifty grand in a solo 401k while sitting in the twenty-four percent bracket? Twelve thousand dollars stays in your pocket immediately. Then the whole pile compounds without taxes eating away at gains for decades.

Keeping Track of Everything

This trips people up constantly. Doesn't matter what you actually spent if you can't prove it later. Auditors don't accept "trust me."

Everything You Should Document

All the money coming in — client payments, those 1099 forms, billing records. All the money going out — save proof of every business purchase. Driving logs with dates and destinations and reasons and distances. Your home office setup with measurements, pictures, copies of utility statements. Work trips with full itineraries and notes on the business purpose.

Apps and Services That Make This Bearable

For receipts, grab something like Expensify or Dext — or honestly just snap photos straight to a cloud folder. Bookkeeping through QuickBooks or FreshBooks handles most of it. Wave costs nothing if you're watching cash. Mile trackers like MileIQ or Everlance or Stride run in the background automatically. Link your bank accounts for auto-categorization once you set things up.

My Personal Approach

First thing — completely separate checking account for all business stuff. Not optional. I spend maybe fifteen minutes each week sorting and scanning things. Reconcile monthly before transactions blur together. Send quarterly estimates so April doesn't wreck me with penalties.

Getting Professional Help

Handling this solo works when things stay straightforward. Freelancing rarely stays straightforward.

Signs You Probably Need Someone

Earnings climbing past seventy-five thousand. Revenue flowing from multiple different sources. Mulling over that S-corp election people mention. Clients in other countries or working abroad yourself. Major equipment buys happening. Fallen behind on those quarterly payments. Brand new to all of this.

Finding the Right Person

They should actually understand self-employed returns — plenty of accountants glaze over at Schedule C stuff. You want someone thinking ahead about strategy rather than just punching numbers once a year. Reachable outside of crunch season, not vanishing until March. Upfront about costs before you commit.

Different Types of Tax People

Enrolled Agents carry IRS credentials and often specialize in individuals and smaller operations. CPAs bring wider expertise and handle more complexity as you grow. Tax attorneys step in for messy situations — audits, disagreements, serious complications.

Ballpark Pricing

Straightforward self-employed filing runs around three to five hundred. More moving pieces bumps that to five hundred through a thousand. Year-round relationship with quarterly check-ins lands somewhere between one and three thousand.

Generally pays for itself through catches and avoided mistakes.

Frequently Asked Questions

Figure out the portion where only work happens. Two options:

  • Quick method: Five dollars per square foot, capping at 300 feet
  • Detailed method: Compare your workspace against total area — say 150 sq ft from a 1,500 sq ft apartment gives you 10% of qualified expenses

The detailed approach usually yields more but demands tracking actual expenses like rent, utilities, insurance, and repairs.

Partially. Match the deduction to actual work use. If 80% of screen time serves business purposes, write off 80%. Keep some kind of log in case questions come up during a review.

Devices used exclusively for work? Grab the whole amount through Section 179.

Half the tab when real business gets discussed. A few requirements:

  • Either you or an employee has to show up
  • Nothing ridiculous or extravagant
  • Record who attended and what topics came up

Meals while traveling for work also hit 50%. Regular groceries at home? Different story entirely.

Two ways to handle this:

  • Standard mileage: 67 cents per mile currently according to the IRS. Track every work-related trip.
  • Actual expenses: Tally up fuel, insurance, repairs, depreciation — then apply whatever percentage represents business driving. More math but sometimes bigger.

Commutes to an office never count. But heading from your home workspace to meet clients? That mileage qualifies.

Under 75 bucks, lean on bank statements and calendar notes and written descriptions.

Larger amounts mean hunting down replacements from wherever you bought stuff. Going forward, just scan everything the moment you get it. Phone apps take three seconds.

Working for yourself with no access to coverage elsewhere — including through anyone you're married to — means you can deduct everything. Full premiums for yourself and dependents.

This comes off above the line, which directly shrinks your AGI. Makes a huge difference.

They work differently:

  • Deductions shrink how much income gets taxed. Knocking a thousand off your taxable amount saves maybe 200-400 depending where you fall.
  • Credits attack your actual bill directly. A thousand dollar credit means a thousand dollars less owed.

Most freelancer expenses work as deductions rather than credits.

The IRS officially says 3 years from when you filed. However:

  • Bump to 6 years if there's any chance you underreported — even accidentally
  • 7 years for situations involving worthless investments or debts going bad
  • Forever if you never filed or something fraudulent happened

Personally I keep everything 7 years minimum. Storage costs basically nothing anymore.

Getting Started Today

Captured write-offs mean captured money. Everything hinges on tracking consistently throughout the year instead of panicking come spring.

What I'd do immediately:

Pick a receipt capture method and start using it tonight. Get a dedicated bank account going if that's still on your someday list. Come back to this stuff every few months as a reminder. Bring in help when your situation has too many angles to manage alone.

Working for yourself comes with real advantages. Holding onto more of your earnings through legitimate deductions should absolutely rank among them.