5 deductions freelancers forget every single year

I've talked to hundreds of freelancers about their taxes. The pattern is always the same: they track the obvious stuff — software subscriptions, a new laptop, maybe their phone bill — and completely miss the deductions that actually move the needle.

These five deductions are worth thousands of dollars a year. And most freelancers either don't know about them or assume they don't qualify.

If you have a dedicated space in your home that you use regularly and exclusively for business, you can deduct it. And the simplified method makes it almost effortless.

The key word is “exclusive.” Your kitchen table doesn't count. But a corner of a bedroom with a desk that you only use for work? That counts. A converted closet? Counts. You don't need a separate room with a door — you need a defined space used only for business.

There's also the regular method, where you calculate the actual percentage of your home used for business and deduct that percentage of rent, utilities, insurance, etc. It's more work but can be worth more than $1,500 if you have a large office or high housing costs.

If you're self-employed and pay for your own health insurance, you can deduct 100% of your premiums— for yourself, your spouse, and your dependents. This isn't an itemized deduction. It's an above-the-line deduction, meaning you get it even if you take the standard deduction.

This also includes dental and vision premiums, plus long-term care insurance (with age-based limits). If you're paying for insurance out of pocket, this is probably your single biggest missed deduction.

This one is wild because it's both a tax deduction and free money for future you. Self-employed retirement accounts let you shelter a huge chunk of income from taxes.

On $80K of net self-employment income, a SEP IRA lets you contribute up to $20,000 — all of it tax-deductible. At a 22% federal rate, that's $4,400 in tax savings, plus you just put $20K toward retirement. This is the move most freelancers sleep on the hardest.

If you've read our breakdown of the 15.3% self-employment tax, you know the number is painful. The small consolation: you can deduct half of your SE tax from your adjusted gross income.

This happens on Schedule SE and flows to your 1040. Most tax software handles it automatically, but if you're estimating quarterly taxes yourself, don't forget to factor it in. A lot of people overpay their estimated taxes because they calculate income tax on their full income without subtracting this deduction first.

Drive to meet clients? Go to a coworking space? Pick up supplies? That mileage is deductible at 67 cents per mile in 2026. It adds up faster than you'd think.

The catch: you need a log. Date, destination, business purpose, and miles driven. An app like MileIQ or just a simple spreadsheet works. The IRS won't accept “I drove a lot for work” as documentation. But 30 seconds of logging after each trip is worth hundreds (or thousands) at tax time.

Note: your daily commute from home to a coworking space is generally not deductible — the IRS treats that like a regular commute. But if your home is your primary office and you drive to a client meeting, that trip qualifies.

Add it all up

None of these are aggressive. None of them are gray areas. They're all standard deductions that the IRS explicitly provides for self-employed people. The only requirement is that you know they exist and you keep decent records.