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As a freelancer, what expenses can I claim as deductions?

Freelancers can also reap tax deduction benefits as individuals and business owners. As individuals, they can claim tax-saving deductions available to salaried individuals and as freelancers, they can claim deductions available to business owners. There are multiple expenses for freelancers to claim as deductions. The only requirement is that these expenses must be related only to the job they’re doing with the following conditions:

  • Expense is for the freelance work being done;
  • Spent fully for work purposes only;
  • Incurred within a tax year, not capital or personal expenditure; and
  • Not incurred for illegal or prohibited uses.

1. Property Rent:Simply put, if a freelancer rents a property for work, the rent amounts are tax-deductible. So, if you rent a desk, co-working space, or office space, you can deduct said amount from your income. If you work from your rented home, you can claim a part of the rent amount as deductions.

2. Repairs Undertaken:By agreeing to pay for repairs on a rented property, those costs can also be deducted. Even repair costs on the business properties such as laptops or printers you own are allowed deductions.

3. Depreciation of Assets:When a freelancer purchases capital assets, benefits can last for a while. As assets are used, their value depreciates. These portions of the asset value can be claimed as deductions from taxable income every year. Even vehicles used for commuting to work are assets that you can claim depreciation on. The rate and methods of depreciation vary across assets.

4. Office Expenses:Expenses you incur to do your work, such as purchasing electronics, office supplies, telecommunication bills, and transportation expenses can be claimed as deductions.

5. Expenses on Meals, Entertainment, and Hospitality:If you conduct meetings with clients, particularly taking them out for meals or outings, any money spent to that end can be claimed as deductions. The money spent must be for the sole intention of winning new business deals or maintaining existing contracts.

6. Contracting Costs:Certain projects require freelancers to enlist the services of another person or firm. Such payments made on a long-term contractual basis are also deductible.

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