Deduction guide
Freelancer / consultant taxes: what you can actually deduct
Design, dev, writing, marketing. If you got a 1099 for this work, here's what counts — and what PrivateBooks sets up for you automatically.
Worth knowing
These are the write-offs people in this line of work most often miss — or claim wrongly. Anything marked in orange is an edge case worth raising with a preparer rather than assuming.
Home office
A space in your home used regularly and ONLY for work can deduct part of your rent and utilities. Don't book rent as an expense — use PrivateBooks' home-office helper (simplified method), which limits it correctly against your income.
$5 / sq ft simplified
Software & tools
Adobe, Figma, hosting, domains — the tools of your trade are fully deductible.
100% tracked
Payment processing fees
Stripe and PayPal take roughly 3% of every invoice you collect. That fee is a deductible merchant fee — easy to miss because it's taken before the money ever reaches you.
~3% of each invoice
Client meals
Coffee or lunch with a client is usually 50% deductible. Keep the receipt and note who you met and why.
50% typical
Health insurance premiums
Self-employed? Your premiums may be deductible — but on your 1040, not Schedule C. PrivateBooks flags these instead of booking them wrong.
at tax time flagged
Retirement contributions
A SEP-IRA or solo 401(k) can shelter a big slice of freelance income. Another 1040-side item worth tracking for tax time.
at tax time flagged
What PrivateBooks pre-loads
Pick Freelancer / consultant during guided setup and your books start with these categories, each already mapped to its real Schedule C line — no chart of accounts to invent:
| Category | Schedule C line |
|---|---|
| Software subscriptions | Line 27b — Other (software & subscriptions) |
| Computer & gear | Line 18 — Office expense |
| Coworking & office space | Line 20b — Rent/lease (other property) |
| Accountant & legal help | Line 17 — Legal and professional services |
| Courses & books | Line 27b — Other (education & training) |
| Website & hosting | Line 27b — Other (software & subscriptions) |
| Finding clients (ads, listings) | Line 8 — Advertising |
| Payment processing fees (Stripe, PayPal) | Line 27b — Other (bank & merchant fees) |
| Business insurance (liability, E&O) | Line 15 — Insurance (other than health) |
| Client meals & coffee | Line 24b — Deductible meals |
| Phone & internet (work %) | Line 27b — Other (phone & internet) |
Merchants it recognises automatically
On top of the 578 built-in sorting rules, this pack adds rules for Contra, Fiverr Fees, Microsoft 365, Upwork Service Fee — so those transactions land in the right category the moment you import a statement. Anything it isn't sure about goes to Review instead of being guessed at.
Do you even have to file?
If you netted $400 or more from self-employment in a year, you generally have to file and pay self-employment tax — even if nobody sent you a 1099, and even if you also have a W-2 job. Nothing was withheld from this income, which is why setting money aside matters.
Educational pointers, not tax advice. Tax rules change and your situation is specific — worth asking about at tax time. The free IRS-sponsored VITA program helps people under its income threshold at no cost.