Deductions That You Can Take as a Freelance Worker

Top Tax Deductions for the Self-Employed

Unlike an employee of a company, a freelance worker is entirely responsible for paying 100 percent of his taxes, which can include Social Security, Medicare and income tax. In general, these taxes are automatically withheld from the average employee’s paycheck by the worker’s employer. In comparison, unless you pay quarterly taxes as a freelance worker, you will have to pay a large lump sum when you file your annual return. However, you can reduce your tax burden by claiming the right deductions.

Insurance Premium Deductions

As a self-employed worker, you are able to deduct your health insurance premiums, which include any costs to cover your family. Additionally, healthcare costs that exceed 10 percent of your annual adjusted gross income can also be claimed as a deduction on your tax return. Obtain the necessary statements from your healthcare provider to view the total premiums, co-payments and deductibles that you can deduct.

Home Office Deduction

If you primarily work from home, you can qualify for the home office deduction, which applies to both renters and homeowners. In order to qualify for this deduction, you must use a specific part of your home to conduct business. For example, you can designate a second bedroom as your office. The deduction is a percentage of your monthly mortgage payment or rent. In addition, you can also deduct other expenses that are related to running your home office, such as Internet, phone and utility bills.

Deduct Travel Expenses

If you travel for business, you can deduct many of your expenses. For example, you can deduct the cost of hotel rooms, plane tickets and business dinners. However, all costs must be business-related. As a result, it is important to keep all receipts of your business travel for your records. For example, if you use your car to travel to a client’s location, you can deduct the dollar value of each business mile traveled on your taxes. However, you need to keep a record of each mile that you drive for business-related activities. When you are ready to file your taxes, one of the many CPA firms in Las Vegas can help you find the best deductions for your situation.