As per Taxlawsinusa, As a freelancer in the USA, you’re eligible for various self-employment tax deductions that can help reduce your taxable income. Here are key deductions to consider:
Business Expenses
1. Home Office Deduction: Deduct a portion of rent/mortgage interest, utilities, and repairs as business expenses if you use a dedicated space for work.
2. Business Use Percentage: Calculate the percentage of your home or car used for business to determine the deductible amount.
3. Travel Expenses: Deduct costs for business trips, including transportation, meals, and lodging.
4. Equipment and Supplies: Deduct expenses for necessary equipment, software, and supplies, such as computers, printers, and writing software.
Tax Deductions
1. Self-Employment Tax Deduction: Deduct half of your self-employment tax on your income taxes.
2. Health Insurance Premiums: Deduct medical and dental insurance premiums for yourself, spouse, dependents, and children under 27.
3. Continuing Education: Deduct costs for qualifying work-related education, including courses, workshops, and conferences.
4. Mileage Deduction: Deduct 67 cents per mile for business use of your car.
Business Liability Insurance
1. Professional Liability Insurance: Deduct premiums for professional liability insurance, which protects against claims of negligence or errors.
Retirement Plan Contributions
1. SEP-IRA: Deduct contributions to a Simplified Employee Pension Individual Retirement Account.
2. Solo 401(k): Deduct contributions to a solo 401(k) plan.
Other Deductions
1. Business Association Fees: Deduct fees for membership in professional associations related to your business.
2. Advertising Expenses: Deduct costs for advertising your business, including online ads, business cards, and brochures.
3. Shipping and Postage: Deduct costs for shipping and postage related to your business.
Record Keeping
1. Accurate Records: Maintain accurate and detailed records of business income and expenses to support your deductions.
2. Supporting Documentation: Keep supporting documentation, such as receipts, invoices, and bank statements, to substantiate your deductions.
Consult with a tax professional or accountant to ensure you’re taking advantage of all the self-employment tax deductions available to you.