dark mode light mode Search

5 Self-Employed Tax Deductions for Graphic Designers

5 Self-Employed Tax Deductions for Graphic Designers

As a creative, you may have a hard time in an office environment. You don’t want to play politics or follow silly rules, you just want to do your job.

Almost 36% of workers are opting to freelance in many different industries, so you’re in good company.

There’s more responsibility that comes with that freedom. Paying your own taxes is at the top of that list. It can be much easier once you understand the self-employed tax deductions you can take advantage of.

Keep reading to learn about the top tax deductions that you should take the next time you file your taxes.

1. Supplies and Software

Graphic designers need the right tools and supplies to do a great job. You are likely to need a subscription to Adobe Creative Cloud for Illustrator, InDesign, and Photoshop.

You’ll need a good printer, ink, Exacto knives, and pencils to sketch out your ideas before you design them.

All of these items are business expenses you can deduct. You need to keep the receipts of all of these expenses.

2. Home Office

You can turn your home office into tax savings by writing off part of your rent or mortgage payments and utilities. The amount you can write off is the percentage of square footage that’s used as your office.

If you work from home, you want to see if you qualify for this deduction. The IRS has strict rules around a home office deduction. It has to be a completely dedicated space for your work. For example, turning a spare bedroom into a home office would qualify.

Do you rent out an office or hot desk? That is one of the self-employed tax deductions you need to include on your tax returns.

3. Meals and Entertainment

When you meet with clients over coffee or lunch, that qualifies as a business expense. Save those receipts and take note of the person you were with and what was discussed. These expenses are written off at 50%.

 5 Self-Employed Tax Deductions for Graphic Designers

4. Pass-Through Business

This is a new deduction that was included the 2018 Tax Cuts and Jobs Act. This deduction allows you to deduct 20% of your total income, which will appear on your personal tax return.

The great thing about this is that it’s not just for big businesses. Freelancers, sole-proprietors, and single-member LLCs can take this deduction.

5. State and Local Taxes

Did you know that you can write off state and local taxes on your federal returns?

This can be challenging to keep track of throughout the year. You’ll want to create a freelance pay stub once every couple of weeks to help you keep track of state and federal taxes.

Take Self-Employed Tax Deductions

Freelancers typically don’t want to deal with things like selling services and taxes. Yet, these are the realities of running a business.

Self-employed tax deductions can make your life easier and lower your tax bill. Using MTD for ITSA compatible software will enable self-employed people to keep digital records of income and expenses and submit their quarterly updates and annual submissions directly from the platform to take advantage of these deductions.

Since Social Security and Medicare are advantages that come with becoming an entrepreneur rather than just receiving an income from employment, new business owners are entirely responsible for paying for them in addition to any income tax.

Would you like some design inspiration for your next freelance project? Check out the design section of the blog for more great articles.