5 Deductions NYC Freelancers Miss Every Single Year
Most freelancers in New York overpay their taxes — not because they cheat themselves, but because nobody told them what counted.
If you're a freelancer in New York — designer, photographer, consultant, driver, anything — the IRS treats you like a one-person business. That means deductions. A lot more of them than you probably think.
Here are five we routinely uncover for new clients who switched from a big-box prep shop or DIY software:
1. Home office (the real version). If you regularly use a clearly defined space in your home for your work — even part of a room — you can deduct a portion of your rent, utilities, internet, and renter's insurance. The simplified method gives you $5 per square foot, up to 300 square feet. That's up to $1,500 with no paperwork beyond a tape measure.
2. Self-employment health insurance. Pay for your own health insurance? If you had a profit for the year, you can deduct 100% of the premiums — including for your spouse and dependents. This is an above-the-line deduction, meaning it lowers your AGI directly.
3. Half of self-employment tax. Self-employment tax is the 15.3% on your net earnings (Social Security + Medicare). The IRS lets you deduct half of it. You'll never see this if you don't file a Schedule C, but it's automatic when you do — provided your preparer is paying attention.
4. Retirement contributions for the self-employed. A SEP-IRA lets you contribute up to 25% of your net self-employment earnings (with a cap). A Solo 401(k) is more flexible. Both are deductible. If you made $80,000 freelancing and contributed $15,000 to a SEP, your taxable income drops by $15,000.
5. Vehicle expenses, the right way. Either standard mileage (67¢ per business mile in 2024) or actual expenses (gas, insurance, repairs, depreciation). Most freelancers pick the wrong one because they don't track mileage. Get a free app. The difference between methods can be $1,000+.
Bottom line: the freelancer who shows up with shoeboxes still gets the standard deduction. The freelancer who shows up with categories and receipts gets back what they actually overpaid.
If you want a second pair of eyes on your last return — free of charge — we'll review it. Sometimes we find money. Often we find peace of mind.