Business expenses for self-employed freelancers: the 2026 deduction list

What makes a business expense deductible?

A business expense is deductible when it is both ordinary and necessary. The IRS defines an ordinary expense as one that is common and accepted in your field, and a necessary expense as one that is helpful and appropriate for your business. It does not have to be indispensable.

Two more rules apply to almost everything below. If an expense is partly personal, you deduct only the business part. And if something lasts well beyond a year, such as a laptop or a desk, you generally recover its cost through depreciation or an expensing election instead of deducting it as a regular expense.

Expenses on Schedule C cut your net profit, which lowers both income tax and self-employment tax. That double effect is why tracking them matters more for freelancers than for employees.

Common deductible expenses for freelancers

Software and subscriptions

The Schedule C instructions say you can deduct technology and software tools that are ordinary and necessary, including tax preparation software and subscription services used to manage your business. Report them as other expenses in Part V. Software you buy outright usually has to be capitalized and depreciated or expensed under Section 179 instead.

Equipment, Section 179 and depreciation

Computers, cameras, furniture and other equipment are capital purchases. You have three main ways to handle them:

• De minimis safe harbor. If you elect it, you can deduct items costing up to $2,500 per item or invoice (up to $5,000 if you have an applicable financial statement, which few freelancers do). These go in Part V.
• Section 179. You can elect to expense the cost of qualifying property in the year you place it in service. For tax years beginning in 2026, the limit is $2,560,000, reduced once total qualifying purchases exceed $4,090,000. Figure it on Form 4562.
• Depreciation. You deduct the cost over the asset's recovery period. Certain qualified property acquired and placed in service after January 19, 2025, can take 100% bonus depreciation.

If you use the equipment partly for personal purposes, only the business-use share qualifies.

Home office

If part of your home is used regularly and exclusively for business, you can deduct it on line 30. The simplified method is $5 per square foot, up to 300 square feet. The regular method uses Form 8829 and actual costs. See the home office deduction guide for the tests and both methods.

Vehicle and mileage

You can deduct actual vehicle costs or use the standard mileage rate. For 2026 the business rate is 72.5 cents a mile from January 1 through June 30 and 76 cents a mile from July 1 through December 31. Business parking and tolls are deductible on top of the rate. The business mileage deduction guide covers logs and when to choose actual expenses.

Phone and internet

Deduct the business share of your cell phone and internet service. For a home landline, the IRS does not allow the base rate of the first line into your home, but you can deduct business costs above that base rate and the business share of a second line. If you claim the regular home office method, do not count the same internet bill twice.

Travel

Lodging and transportation for overnight business travel away from your tax home are deductible on line 24a. Your tax home is generally your main place of business. Travel costs for a spouse or companion are not deductible unless that person is your employee, the trip has a bona fide business purpose, and the costs would otherwise be deductible by that person.

Business meals: the 50% rule

In most cases you can deduct 50% of a business meal, including meals while traveling for work. The meal must be ordinary and necessary, not lavish, and you (or your employee) must be present. Enter only the deductible amount on line 24b. Entertainment is a separate category and is not deductible.

Education

Courses, workshops and training qualify when they maintain or improve skills you need in your current work. Education that you need to meet the minimum requirements of your field, or that qualifies you for a new trade or business, does not. Self-employed people deduct qualifying education directly from business income.

Professional fees and insurance

Accountant and attorney fees tied to the business go on line 17, including the cost of preparing the business part of your return. Business insurance, such as liability or professional coverage, goes on line 15. Health insurance for yourself does not belong on Schedule C (see below).

Advertising and marketing

Website hosting, ads, business cards and similar promotion costs go on line 8. If you pay a designer or developer who is not your employee to build your site, that payment is contract labor.

Contract labor and the 1099-NEC duty

Payments to subcontractors and other freelancers you hire go on line 11. Deducting them comes with a filing duty: for payments made after 2025, you generally must file Form 1099-NEC for each person you pay at least $2,000 for services in the course of your business. The form is due January 31, moved to the next business day when that date falls on a weekend. Collect a Form W-9 from each contractor before you pay them.

Bank and payment fees

Bank fees are on the IRS list of deductible business expenses. Fees on a dedicated business account and processing fees on client payments are part of the cost of getting paid; list them with your other expenses in Part V.

Retirement and health insurance: deductions, but not on Schedule C

Two of the biggest tax breaks for freelancers are adjustments to income on Schedule 1 of Form 1040, not business expenses:

• Retirement contributions you make for yourself to a SEP, SIMPLE or solo 401(k). Compare the options in the SEP IRA vs solo 401(k) guide.
• Health insurance premiums for you, your spouse and dependents. See the self-employed health insurance deduction guide.

Because they are not on Schedule C, these deductions lower income tax but not self-employment tax. Contributions you make for employees, by contrast, are business expenses on lines 14 and 19.

Where each expense goes on Schedule C

Line numbers below are from the 2025 Schedule C. The IRS's early release draft of the 2026 form uses the same numbers for these lines; check the final 2026 form before you file.

What is not deductible

• Commuting. Driving between your home and your main or regular workplace is personal, and so is parking at that workplace.
• Personal, living and family expenses, such as everyday clothing, groceries and personal grooming.
• Entertainment, such as tickets to games or shows, even with a client.
• Fines and penalties paid to a government for breaking the law, such as traffic tickets. Penalties you pay a client for late work under a contract are a different matter and can be deductible.
• Club dues for business, social, athletic or luncheon clubs, plus political contributions, lobbying and charitable contributions.
• Your own pay. As a sole proprietor you are not an employee, so draws you take from the business are not an expense.

Startup costs

In the year your business begins, you can elect to deduct up to $5,000 of startup costs, reduced once total startup costs pass $50,000. The rest is amortized over 180 months.

Putting expenses to work

Expenses shrink the profit your taxes are based on, so they also shrink the rate you need to charge. The freelance rate calculator lets you enter your monthly business costs, the self-employment tax calculator shows the tax on your net profit, and the quarterly estimated tax calculator turns that into payments. For how these lines fit together on the form, see Schedule C for freelancers.