How Much Do Freelance Deductions Actually Save You?
Every dollar of legitimate business expense you deduct reduces both your income tax and your self-employment tax, since self-employment tax is calculated on your net (post-deduction) business income. This freelance tax deduction estimator shows exactly how much your deductions are worth in real tax savings.
💡 Quick Summary
In the US, self-employment tax is 15.3% of 92.35% of net earnings (covering Social Security and Medicare), calculated separately from federal income tax on the same net income.
Common Freelance Business Deductions
- Home office — a portion of rent/mortgage, utilities, and internet based on office square footage
- Equipment & software — computers, cameras, subscriptions, tools used for work
- Professional services — accounting, legal, and consulting fees
- Business travel & mileage — client meetings, conferences, work-related trips
- Marketing — website hosting, advertising, portfolio costs
- Health insurance premiums — often deductible for self-employed individuals
How This Calculator Works
The calculator subtracts your expenses from gross income to get net business income, then estimates self-employment tax (15.3% of 92.35% of net income) and federal income tax (your marginal rate applied to net income). It compares this to the tax you'd owe with no deductions at all, and the difference is your estimated tax savings.
This is a simplified educational estimate. It does not account for the standard deduction, the qualified business income (QBI) deduction, state taxes, tax credits, or your exact bracket structure. Consult a tax professional or accountant for an accurate calculation specific to your situation.