Summary of What This Blog Covers
- Identify key deductions like home office, vehicle use, software, and marketing to reduce taxable income.
- Maximize savings through health insurance and retirement contributions.
- Track commonly missed write-offs like business meals, internet, and coworking fees.
- Work with a CPA to build a proactive, year-round tax strategy tailored to your business.
You didn’t become your own boss to work around the clock, wear every hat imaginable, and then lose your hard-earned income to taxes.
And yet every year, small business owners and freelancers overpay the IRS. Why? Because they miss deductions. They wait until April to think about taxes. Or they rely on basic software that doesn’t understand the nuance of their business.
If that sounds familiar, you’re in the right place. At Insogna CPA, we’ve worked with countless freelancers, consultants, and growing businesses across Austin and the U.S. to legally reduce their tax burden, track every legitimate expense, and build tax strategies that support long-term growth.
Today, we’re walking you through how to maximize your tax deductions as a freelancer or small business owner: what’s actually deductible, how to stay compliant, and why a strategic CPA relationship matters more than ever.
Let’s get started.
What Are Tax Deductions and Why Do They Matter?
Tax deductions, sometimes called “write-offs,” lower your taxable income. That means you’re not taxed on your gross revenue, but rather your net income: what’s left after deducting qualifying business expenses.
Here’s a simple example:
- You earn $100,000 in total revenue.
- You track $30,000 in deductible business expenses.
- The IRS taxes you on $70,000 not the full $100,000.
In many cases, this reduction in taxable income can save you thousands or tens of thousands in federal and state income tax, self-employment tax, and possibly more depending on your state and business structure.
The catch? You need to know what’s deductible, maintain accurate records, and, ideally, build a proactive tax strategy with a professional.
That’s where we come in.
Top Tax Deductions for Freelancers and Small Business Owners
This is not an exhaustive list, but these are some of the most common and most powerful deductions our clients benefit from.
1. Home Office Deduction
If you work from home and use a portion of it exclusively and regularly for business, you may qualify for a home office deduction.
You can choose between two methods:
- Simplified Method: $5 per square foot of home office space, up to 300 sq. ft. (max $1,500).
- Actual Expense Method: Deduct a percentage of your mortgage interest or rent, utilities, home insurance, repairs, depreciation, and more based on the square footage of your office space compared to your home.
Key Requirement:
The space must be used only for business. Your guest room or kitchen table won’t qualify unless it’s exclusively your workspace.
This deduction is often overlooked due to fear of triggering an audit. With clear documentation and expert guidance, however, it’s a legitimate and valuable deduction.
2. Business Use of Your Vehicles
If you use your vehicle for business even occasionally, you can deduct mileage or actual vehicle-related expenses.
Two Options:
- Standard Mileage Rate: For 2025, the IRS standard mileage rate is 67 cents per business mile. Just multiply your business miles by this rate to calculate your deduction.
- Actual Expense Method: Deduct a percentage of your total vehicle expenses (car payments, insurance, maintenance, repairs, gas, and depreciation) based on how much you use the vehicle for business.
What Counts as Business Use:
- Driving to meet clients
- Picking up supplies or materials
- Traveling to and from networking or industry events
- Visiting job sites or business locations
Tip: Use apps like MileIQ, Everlance, or QuickBooks Self-Employed to automatically track mileage and generate IRS-compliant reports. Consistent recordkeeping makes a big difference come tax season.
3. Health Insurance Premiums
Self-employed individuals who are not eligible for an employer-subsidized plan (through a spouse, for example) can deduct the full cost of their health insurance premiums.
This includes:
- Health insurance
- Dental insurance
- Vision insurance
- Long-term care premiums (limited by age-based thresholds)
- Coverage for your spouse and dependents
Unlike many deductions, this one applies even if you don’t itemize your deductions.
4. Business Software and Subscriptions
Nearly all modern businesses rely on digital tools. If you pay for any app, software, or service necessary for your business operations, it’s deductible.
Examples:
- Accounting: QuickBooks, Xero, FreshBooks
- Communication: Zoom, Slack
- Project Management: Asana, Trello, Notion
- Cloud Storage: Google Drive, Dropbox
- Creative: Canva, Adobe Creative Cloud
Always keep receipts and clarify which tools are used solely for business.
5. Marketing and Advertising
Marketing is a business necessity and every dollar you spend to promote your business is generally deductible.
This includes:
- Social media advertising (Facebook, Instagram, LinkedIn, etc.)
- Paid search ads (Google Ads, Bing)
- Website hosting and maintenance
- SEO services and consultants
- Content creation (copywriting, design)
- Branding and logo design
- Promotional materials
- Professional photography or video services
Whether you’re running campaigns yourself or hiring an agency, these costs are deductible business investments.
6. Continuing Education and Professional Development
The IRS allows deductions for educational expenses that help you maintain or improve skills required in your current profession.
Eligible expenses include:
- Online courses and workshops
- Industry certifications
- Professional books and trade publications
- Conference attendance and travel
- Memberships in professional organizations
However, expenses for entering a new field are not deductible. For example, if you’re a graphic designer and you take courses in web design, that qualifies. If you switch from marketing to real estate, it does not.
7. Retirement Contributions
One of the most effective ways to reduce your taxable income while building long-term wealth is to contribute to a qualified retirement plan for the self-employed.
Options include:
- SEP IRA: Contribute up to 25% of net earnings, with a maximum contribution limit of $69,000 for 2025.
- Solo 401(k): Allows both employee and employer contributions, with a total limit of $69,000 in 2025, or $76,500 if you’re age 50 or older (includes catch-up contributions).
- SIMPLE IRA: Designed for small businesses with employees. The 2025 contribution limit is $16,500, with an additional $3,500 catch-up allowed for those 50 and older.
Which plan is best? It depends on your income level, whether you have employees, and your long-term financial goals. A qualified CPA in Austin, Texas can guide you through the decision and ensure your contributions are optimized for tax savings.
Frequently Overlooked Deductions
Even meticulous business owners can overlook these:
- Business meals (50% deductible): Includes client meetings or meals while traveling for work.
- Client gifts: Deduct up to $25 per client per year.
- Business insurance: Professional liability, cyber insurance, and general business coverage.
- Business loan interest: If the loan is for business expenses, the interest is deductible.
- Internet and phone bills: Deduct the portion used for business purposes.
- Bank and credit card fees: Business account fees and processing fees count.
- Coworking space fees: Monthly memberships and day-use passes can be deducted.
Every small deduction adds up. Consistent tracking ensures you don’t leave money on the table.
FBAR and Foreign Accounts: What You Need to Know
Do you have foreign bank accounts, brokerage accounts, or even crypto assets stored offshore?
If the total value of your foreign financial accounts exceeds $10,000 at any point during the year, you’re required to file an FBAR (Report of Foreign Bank and Financial Accounts) with the Treasury Department.
Failing to file FBARs can lead to serious penalties, including fines and criminal charges.
At Insogna CPA, we offer FBAR filing support for business owners and freelancers who operate globally. Whether you’re managing overseas investments or working abroad, we’ll help you stay compliant.
Why You Need More Than Just a Tax Preparer
There’s a difference between tax preparation and tax strategy.
A tax preparer records what already happened. A strategic CPA partner helps you plan ahead, making decisions now that affect your bottom line next year and beyond.
At Insogna CPA, we are more than a tax preparation service near you, we’re your financial strategy partner. We work with:
- Freelancers
- Consultants
- Creative professionals
- Coaches and agency owners
- E-commerce sellers
- Small business service providers
We support clients locally here in Austin, TX and virtually across the U.S., providing proactive tax planning and personalized CPA guidance all year round.
How to Work with Insogna CPA
We don’t just prepare taxes. We help you:
- Track and categorize expenses throughout the year
- Set up the right retirement and business structure
- Plan quarterly estimated payments
- Ensure IRS compliance
- Find every deduction available to you
Whether you’re looking for:
- A certified CPA near you
- An Austin, TX accountant for small business
- Tax strategy services tailored to freelancers
- FBAR filing help
- Or a long-term partner you can trust…
We’re here.
Start Saving More Today – Book a Tax Strategy Session
You didn’t build a business just to give more to the IRS than you have to. Let’s put your tax strategy to work.
Book your free consultation with Insogna CPA, and let’s maximize every deduction, reduce your stress, and keep more of your hard-earned income exactly where it belongs: in your business.
We proudly serve as your trusted:
- Tax preparer near you
- Tax advisor in Austin
- Certified public accountant near you
- CPA in Austin for freelancers and small businesses
- Enrolled agent and FBAR specialist
- Long-term tax strategist and financial guide
Let’s take your taxes from a liability to an opportunity.