Not tax advice. This cheat sheet is general information for US federal income taxes, tax year 2026 (the return you file in 2027). It isn't legal, tax or financial advice, and rules depend on your situation and your state. Figures were checked against IRS and SSA sources in October 2026 and can change. Confirm with a qualified tax professional before you file.
When you work for yourself, every legitimate business expense you deduct lowers both your income tax and your self-employment tax. That makes deductions worth more to freelancers than to most employees, and it makes accurate records worth the effort.
This cheat sheet lists the deductions US freelancers, contractors and sole proprietors most often use for tax year 2026, with the official 2026 figures and a link to the IRS source for each.
Key takeaways
2026 mileage changed mid-year: 72.5¢ per mile through June 30, 2026, and 76¢ per mile from July 1, 2026.
Self-employment tax is 15.3%, with the Social Security part applying to the first $184,500 of 2026 earnings. Half of it is deductible.
The QBI deduction (up to 20%) is now permanent, and from 2026 there's a $400 minimum if you have at least $1,000 of qualified business income.
Retirement limits rose: $24,500 401(k) deferrals, $72,000 total defined-contribution limit, $7,500 IRA.
Entertainment is not deductible. Business meals are, at 50%.
2026 figures at a glance
Item | 2026 figure | Source |
|---|---|---|
Business standard mileage rate | 72.5¢/mile (Jan 1–Jun 30); 76¢/mile (Jul 1–Dec 31) | IRS standard mileage rates |
Home office, simplified method | $5 per sq ft, up to 300 sq ft ($1,500 max) | IRS simplified option |
Self-employment tax rate | 15.3% (12.4% Social Security + 2.9% Medicare) on 92.35% of net earnings | IRS SE tax page |
Social Security wage base | $184,500 | SSA |
Additional Medicare Tax | 0.9% above $200,000 (single) / $250,000 (joint) | IRS SE tax page |
QBI deduction threshold | $201,750 (single and most others) / $403,500 (married filing jointly) | Rev. Proc. 2025-32 |
QBI phase-in range ends at | $276,750 / $553,500 | Rev. Proc. 2025-32 |
QBI minimum deduction | $400 if QBI is at least $1,000 | Rev. Proc. 2025-32 |
Section 179 limit | $2,560,000, reduced above $4,090,000 of purchases; SUVs capped at $32,000 | Rev. Proc. 2025-32 |
Bonus depreciation | 100% for qualified property acquired after Jan 19, 2025 | IRS / Notice 2026-11 |
401(k) employee deferral | $24,500 (+$8,000 at 50+; +$11,250 at ages 60–63) | IRS / Notice 2025-67 |
Defined contribution total (solo 401(k), SEP) | $72,000 | Notice 2025-67 |
IRA contribution | $7,500 (+$1,100 at 50+) | IRS |
HSA contribution | $4,400 self-only / $8,750 family | Rev. Proc. 2025-19 |
Standard deduction | $16,100 single / $32,200 joint / $24,150 head of household | Rev. Proc. 2025-32 |
Start-up costs | Deduct up to $5,000, reduced once costs exceed $50,000 | IRS Pub. 583 |
Form 1099-NEC threshold | $2,000 (payments made after Dec 31, 2025) | IRS 1099 instructions |
Want to see what these numbers mean for you? Plug your income into our self-employment tax calculator or estimate your whole bill with the freelance tax calculator.
How deductions work when you're self-employed
There are three layers, and it helps to know which one a deduction belongs to.
Business expenses (Schedule C). These reduce your net profit, which lowers both income tax and self-employment tax. Most of this cheat sheet lives here.
Adjustments to income (Schedule 1). Half of your SE tax, self-employed health insurance, SEP or solo 401(k) contributions and HSA contributions. These lower income tax but not SE tax.
Standard or itemized deductions, the QBI deduction, and credits. These apply after the first two. Most people take the standard deduction; itemizing only helps if your itemized total is higher.
The test for any business expense is that it's ordinary and necessary for your line of work. Personal expenses don't qualify, and mixed-use items (phone, car, home) are deductible only for the business share.
Business deductions (Schedule C)
Home office
If part of your home is used regularly and exclusively for business and it's your principal place of business, you can deduct it, whether you rent or own. A desk in a guest room that doubles as a TV room doesn't count.
Simplified method: $5 per square foot, up to 300 square feet, so a maximum of $1,500. No depreciation, minimal records.
Regular method (Form 8829): the business percentage of rent or mortgage interest, utilities, insurance, repairs and depreciation. More work, often a bigger deduction for larger spaces.
Car and business mileage
Choose one of two methods for each vehicle:
Standard mileage rate: 72.5¢ per business mile for trips from January 1 to June 30, 2026, and 76¢ per mile from July 1 to December 31, 2026. Business parking and tolls are deductible on top.
Actual expenses: the business share of gas, repairs, insurance, registration, lease payments or depreciation.
Commuting from home to a regular workplace isn't deductible. Keep a mileage log with the date, destination, purpose and miles of each trip.
Phone and internet
Deduct the business-use percentage of your phone and internet bills. Estimate it from a representative period and keep notes on how you calculated it. A separate business line is 100% deductible.
Equipment and software
Computers, cameras, furniture and other equipment can often be written off in the year you buy them:
Section 179: expense up to $2,560,000 of qualifying property in 2026 (far above what most freelancers spend), limited to your business income.
Bonus depreciation: 100% first-year depreciation is now permanent for qualified property acquired after January 19, 2025.
Software subscriptions, including your invoicing and design tools, are normally deducted as ordinary business expenses.
Office supplies
Paper, printer ink, postage, small tools and other supplies used up in your business are deductible in the year you buy them.
Business travel
Travel is deductible when your work takes you away from your tax home (the general area of your main place of business) for longer than an ordinary workday and you need to sleep or rest there. Deductible costs include airfare, lodging, local transport, and 50% of meals. There is no specific mileage cut-off; the "100 miles" figure you may have seen doesn't come from the IRS travel rules.
If a trip mixes business and vacation, only the business portion counts.
Business meals (50%)
You can deduct 50% of a business meal if you or an employee are present, the meal isn't lavish, and it's with a client, customer or business contact you're discussing business with. Keep the receipt and note who attended and what you discussed.
Entertainment: not deductible
Concert tickets, golf, sporting events and similar entertainment are not deductible, even with a client. If you buy food at an entertainment event, the food can count as a meal only if it's bought separately from the entertainment.
Business gifts
Gifts to clients are deductible up to $25 per recipient per year.
Professional fees and contract labor
Accountants, tax preparers, lawyers, and subcontractors you hire are deductible. If you pay an individual contractor $2,000 or more during 2026 for services, you generally need to issue them a Form 1099-NEC (the threshold was $600 for earlier years).
Advertising and marketing
Website hosting, domain names, ads, business cards, portfolio sites and promotional materials are deductible.
Business insurance
Premiums for general liability, professional liability (errors and omissions), and business property insurance are deductible. Health insurance is handled separately (see below).
Bank fees, payment fees and interest
Business bank account fees, card processing fees (Stripe, PayPal and similar), and interest on business loans or business credit cards are deductible. Our Stripe fee calculator helps you see how much you paid in processing.
Education
Courses, workshops, books and conferences that maintain or improve skills in your current business are deductible. Training for a new profession isn't.
Start-up costs
If you started your business in 2026, you can elect to deduct up to $5,000 of start-up costs (market research, pre-launch advertising, training) in the year you open. The $5,000 shrinks dollar-for-dollar once total start-up costs exceed $50,000, and the rest is amortized over 180 months.
Unpaid invoices are usually not deductible
Most freelancers use the cash method, meaning income counts when you receive it. Because an unpaid invoice was never counted as income, you can't deduct it as a bad debt. A clear invoice process is your best protection: send promptly, follow up, and consider a late fee policy with our late fee calculator.
Deductions on your personal return
Half of your self-employment tax
Self-employment tax is 15.3% of 92.35% of net earnings (owed once net earnings reach $400). The 12.4% Social Security part stops at $184,500 of combined wages and self-employment earnings in 2026; the 2.9% Medicare part has no cap, and an extra 0.9% applies above $200,000 single or $250,000 joint. You deduct half of your SE tax as an adjustment to income.
Self-employed health insurance
You can deduct premiums for medical, dental, vision and qualified long-term care insurance for yourself, your spouse and dependents (Form 7206). You can't take it for any month you were eligible for a subsidized plan through an employer, including your spouse's, even if you didn't enroll. The deduction can't exceed your business's net profit.
Retirement contributions
Retirement plans are often the biggest deduction available to freelancers:
Solo 401(k): up to $24,500 of employee deferrals in 2026, plus employer profit-sharing contributions, up to $72,000 combined. Catch-up contributions are extra: $8,000 at 50+, or $11,250 at ages 60 to 63. Roth deferrals are not deductible.
SEP-IRA: employer contributions up to $72,000, limited to roughly 20% of net self-employment earnings after the SE tax adjustment.
Traditional IRA: up to $7,500 ($8,600 at 50+). If you're covered by a workplace plan, including your own SEP or solo 401(k), the deduction may be limited by income.
Health savings account (HSA)
If you have a qualifying high-deductible health plan, you can deduct HSA contributions up to $4,400 for self-only coverage or $8,750 for family coverage in 2026.
Qualified business income (QBI) deduction
Many sole proprietors can deduct up to 20% of qualified business income. The One, Big, Beautiful Bill Act made this deduction permanent. For 2026:
Below $201,750 of taxable income ($403,500 married filing jointly), most freelancers qualify without extra limits.
Above that, limits phase in until $276,750 ($553,500 joint). For service businesses such as consulting, law, accounting and health, the deduction phases out completely above those amounts.
New for 2026: a minimum $400 deduction if you have at least $1,000 of QBI from a business you materially participate in.
QBI lowers income tax only, not SE tax, and you get it whether or not you itemize.
Credits and personal deductions worth knowing
These aren't business expenses, but they often matter to freelancers:
Child and dependent care credit: from 2026, the maximum credit rate rises to 50% of qualifying expenses (up to $3,000 for one person, $6,000 for two or more). The rate decreases as income rises.
Adoption credit: up to $17,670 of qualified adoption expenses in 2026, with up to $5,120 refundable. It phases out between $265,080 and $305,080 of modified AGI.
Charitable donations: new for 2026, if you take the standard deduction you can still deduct up to $1,000 ($2,000 joint) of cash gifts to qualifying charities. Itemizers deduct donations on Schedule A as before.
Medical expenses: if you itemize, you can deduct unreimbursed medical costs above 7.5% of your AGI.
State and local taxes (SALT): itemizers can deduct up to $40,400 of state and local taxes, with a phase-down at higher incomes.
Standard deduction: $16,100 single, $32,200 joint, $24,150 head of household. Compare this with your itemized total.
Records: what the IRS expects
Deductions are only as good as the records behind them. Keep:
Receipts, invoices and bank or card statements showing what you paid, when and to whom.
A written note of the business purpose for meals, travel and gifts, including who was there.
A mileage log written at or near the time of each trip.
Records of the income you received. A tool with income tracking, such as Onigiri Pro, gives you a ready list of paid invoices for your Schedule C.
Lost a receipt? For most travel, meal and gift expenses under $75 (but never lodging), the IRS doesn't require the receipt itself, but you still need a record of the amount, date, place and business purpose. Bank statements and calendar entries help reconstruct the rest.
Key 2026 tax dates
Date | What's due |
|---|---|
April 15, 2026 | 1st estimated payment for 2026 |
June 15, 2026 | 2nd estimated payment |
September 15, 2026 | 3rd estimated payment |
January 15, 2027 | 4th estimated payment (optional if you file and pay in full by February 1, 2027) |
April 15, 2027 | Generally the deadline to file your 2026 return |
Payment platforms report income too: Forms 1099-K are generally required when you receive more than $20,000 across more than 200 transactions through a platform, and clients may send 1099-NECs for $2,000 or more. You owe tax on all business income, whether or not you receive a form.
Common mistakes to avoid
Skipping estimated payments. Underpaying during the year can trigger a penalty even if you pay everything in April.
Deducting personal expenses. Family meals, personal streaming services and commuting don't qualify.
Claiming entertainment. It's not deductible.
Writing off unpaid invoices under the cash method.
Forgetting small recurring costs like software subscriptions, payment processing fees and bank fees.
Not separating business and personal money. A dedicated business account makes everything easier to prove.
For a step-by-step plan for filing season, see our freelancer's guide to tax season. And if you're still setting up your workspace, our tips on how to work from home cover the practical side of a home office.
