Freelancers and small business owners can take advantage of various tax deductions to lower their taxable income. Key deductions include:

  • Home Office Deduction: If you use part of your home exclusively for business, you can deduct a portion of your rent or mortgage, utilities, property taxes, and mortgage interest based on the square footage of your home office.
  • Office Equipment and Supplies: Expenses for computers, furniture, office supplies, and other necessary equipment used for business purposes can be deducted.
  • Business Travel Expenses: Costs related to business travel, such as transportation, lodging, and meals, may qualify as deductions.
  • Other Business Expenses: This includes professional services, advertising, software subscriptions, and any other costs directly related to operating your business.

Proper documentation and receipts are essential to substantiate these deductions, so keep accurate records throughout the year. Consulting a tax professional can also help ensure you maximize your deductions while staying compliant with tax regulations.