Freelancers and solopreneurs have the advantage of writing off many business expenses, but it's important to know what qualifies. Here are some of the most common tax write-offs you should be taking advantage of:
Home Office Deduction: If you work from home, you can deduct a portion of your rent, mortgage, utilities, and internet expenses based on the percentage of your home used for business.
Business Equipment: Any necessary tools for your business, like computers, software, or office furniture, can be written off. Make sure to keep receipts and records for these purchases.
Travel and Meals: If you travel for work or meet clients over meals, you can deduct travel expenses, including flights, hotel stays, and 50% of meals. Keep detailed records of business-related trips.
Health Insurance Premiums: Self-employed individuals can deduct health insurance premiums for themselves, their spouse, and dependents. This can be a significant tax break.
Marketing and Advertising: Any costs associated with marketing your business, such as website development, social media ads, or business cards, are deductible.
Retirement Contributions: Contributing to retirement plans like an IRA or SEP IRA not only helps secure your future but also reduces your taxable income for the year.
By keeping track of your write-offs throughout the year, you can lower your tax bill significantly and keep more of your hard-earned income.
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