What you can actually deduct when you work for yourself

A deduction is not a discount — it lowers the profit your tax is calculated on, not the tax itself. Spend $100 on something deductible and you do not save $100. You save whatever your marginal rate is on that $100, which for most self-employed people is somewhere around $25 to $35.

That distinction matters because it is the reason “buy it before year end for the write-off” is usually bad advice. Buying a $2,000 laptop you do not need to save $600 in tax is still $1,400 worse off than not buying it. Deductions are for reducing tax on money you were going to spend anyway.

With that said, most self-employed people under-claim rather than over-claim, usually because they never wrote it down. Here is what actually qualifies.

The test everything has to pass

An expense is deductible if it is ordinary and necessary for your business: common in your line of work, and helpful for doing it. That is a genuinely wide net, and it is also the whole rule. There is no secret list.

Where people go wrong is not on the ordinary-and-necessary part but on the split between business and personal. Most of the arguments the IRS has with self-employed people are about apportionment, not about whether the category exists.

The home office

Two things have to be true: the space is used exclusively for business, and it is your principal place of business. Exclusively is the strict one. A desk in the corner of a spare room can qualify; the kitchen table where you also eat cannot.

If it qualifies, there are two ways to calculate it.

Home office: two methods, same room

A 12×12 room, 144 square feet, in a home with $28,000 of annual running costs.

Simplified: $5 per square foot, up to 300 square feet, so $1,500 is the most it can ever produce. No Form 8829, no depreciation, no utility bills to keep. You need one number: the square footage.

Regular: work out what percentage of your home the office is, then deduct that percentage of rent or mortgage interest, utilities, insurance, repairs and depreciation. More work, more records, and usually a bigger number — particularly if you rent somewhere expensive.

The simplified method is not the lazy choice. It is the right choice for a small room in a cheap home, and it removes the depreciation question entirely, which is worth something on its own.

The vehicle

Also two methods, and also a real decision. The standard mileage rate for 2026 is 72.5¢ a mile for January to June and 76¢ from July — it changed mid-year, which is unusual enough that it has its own guide. The alternative is actual expenses: fuel, insurance, repairs, depreciation, apportioned by business use.

The rule that catches everyone: commuting is not deductible. Home to a regular workplace and back does not count, however self-employed you are. Travel between job sites, to clients, to suppliers does.

Phone and internet

Deduct the business share, not the bill. If you use your phone 60% for work, 60% of the bill is deductible. Nobody expects a call-by-call log, but they do expect a defensible basis for the percentage rather than a number that happens to be convenient.

A second line used only for business is fully deductible and much easier to justify, which is part of why it is worth having.

Equipment and software

Tools, computers, cameras, machinery. Small items are usually deducted in the year you buy them; larger ones may be depreciated over several years, though provisions like Section 179 often let you take it all at once. Software subscriptions are ordinary running costs.

If an item is used personally as well, apportion it. A laptop used 80% for work is an 80% deduction.

The rest of the ordinary list

• Professional fees — accountant, lawyer, bookkeeper.
• Insurance for the business, and often health insurance premiums, which have their own rules.
• Advertising and marketing, including your website and hosting.
• Education that maintains or improves skills for the work you already do — not training that qualifies you for a new career.
• Bank and merchant fees, including card processing.
• Business travel — flights, lodging, and half of meals while traveling for work.

What people think counts and does not

• Commuting. The most common one by a distance.
• Ordinary clothing. Even if you only wear it for work. The test is whether it is suitable for everyday wear — a branded uniform or genuine safety gear qualifies, a suit does not.
• The whole phone bill, unless the line really is business-only.
• Meals alone. Lunch by yourself between jobs is not a business meal.
• The gym, in almost every case.

The records are the deduction

All of this rests on being able to show what you spent and why. A bank statement proves money left; it does not prove what for. Keep the receipt, and note the business purpose while you still remember it.

The practical version: photograph receipts when you get them, keep a mileage log with dates, and write down the business-use percentage you used for anything apportioned — along with how you arrived at it. A percentage you can explain is worth far more than one you can only assert.

Questions, answered

What can I write off as self-employed?

Anything ordinary and necessary for your business: home office, vehicle mileage, the business share of phone and internet, equipment and software, professional fees, insurance, advertising, bank and merchant fees, and business travel. The test is whether the expense is common in your line of work and helpful for doing it, and anything used personally as well has to be apportioned.

How much is the home office deduction in 2026?

Under the simplified method it is $5 per square foot up to 300 square feet, so the maximum is $1,500. The regular method has no cap but requires Form 8829, records of your actual home costs, and depreciation. The space must be used exclusively and regularly as your principal place of business either way.

Does a deduction save me the full amount I spent?

No. A deduction reduces the profit your tax is calculated on, not the tax itself. Spending $100 on something deductible saves you your marginal rate on that $100, which for most self-employed people is roughly $25 to $35. This is why buying things you do not need for the write-off leaves you worse off.

Can I deduct my commute?

No. Travel between your home and a regular place of work is commuting and is not deductible, even when you are self-employed. Travel between job sites, to clients, to suppliers, or to a temporary work location away from your usual area generally does count.

Sources

1. Simplified option for home office deduction — IRS. The $5 per square foot rate, the 300 sq ft cap and the $1,500 maximum.
2. Topic no. 509, Business use of home — IRS. The exclusive-use and principal-place-of-business tests, and the regular method.
3. Standard mileage rates — IRS. The 2026 rates, including the mid-year change on July 1.
4. Guide to Business Expense Resources — IRS. What ordinary and necessary means, category by category.
5. Recordkeeping — IRS. What you are expected to keep, and for how long.

Looking for more?

Related guides

• The 2026 mileage rate changed mid-yearTwo rates in one tax year, and how to split them.
• How much to set aside for taxes when self-employedDeductions lower the profit this is calculated on.
• Quarterly estimated taxesWhere the reduced number actually shows up.

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General information, not tax advice. The 2026 figures here were checked against the IRS on September 4, 2026 and change from year to year. Which method suits your home or vehicle, whether a particular expense qualifies, and how to apportion mixed-use items are all questions that depend on your circumstances — ask an accountant before relying on any of it.