Tax help for designers who work for themselves
You bill by the project, you buy your own software, and usually nothing is withheld from what you get paid. We handle the tax side of that.
Nothing is due today. Personal returns start at $250.
Design income does not arrive in one clean piece. Some clients send a Form 1099-NEC, some pay through a platform that issues a Form 1099-K, and some just pay the invoice and send nothing at all. Your costs look different too, because the money goes to software seats, type licenses, and hardware that has to keep up, not to inventory sitting on a shelf.
What freelance designers can usually deduct
Ordinary and necessary costs of your work. Rules and dollar limits change year to year, so we confirm every one of these against the current year when we prepare your return.
Design software subscriptions
Creative Cloud, Figma, Affinity, Procreate, Blender plugins, Frame.io, and the proofing and file transfer tools. Monthly or annual, the business portion is deductible.
If a seat is shared with family or used for personal projects, only the business share counts. Keep the annual invoice from the vendor, not just the card charge.
Fonts, stock, and asset licenses
Type licenses, stock photography, icon sets, mockup and template packs, 3D assets, and brush and texture libraries. These are ordinary costs of producing the work.
A license you buy for one client job is still your expense. If you bill it back to the client, the reimbursement is income to you and the license is a deduction, so both sides belong on the return.
Computer, tablet, and display
The Mac or PC, the iPad and stylus, the Wacom or Cintiq, the second monitor, the color calibrator, external drives, and the dock everything plugs into.
Gear you use for work and for life is deductible only by the business share, so set an honest split and write down how you got there. Larger purchases can sometimes be written off in the first year or spread over several years, and which one is better depends on your profit that year and on limits that apply, so we decide it with the return in front of us.
Home studio space
If you work from a space at home that you use only for the business, a share of your rent or mortgage interest, utilities, and renters or homeowners insurance can be deductible, based on how much of the home that space takes up. There is also a simplified option that uses a set rate per square foot instead of your actual costs.
The space has to be used regularly and only for business. It does not have to be a whole room, but any personal use of that space breaks the deduction. The deduction also cannot create or increase a loss, so the part you cannot use this year carries forward. If you own the home, the business share includes depreciation, which affects your gain when you sell.
Portfolio site and domain
Squarespace, Webflow, Cargo, hosting, your domain renewal, business email, the Behance or Dribbble subscription, and the proposal and invoicing tools clients see.
If the same site does double duty as a personal blog, deduct only the business share. A domain you registered and never used for the business is not a business expense.
Printing, proofs, and samples
Test prints, paper stock, proofs from the printer, bound portfolio books, and the packaging and postage when you ship samples to a client or a competition.
Entry fees for design competitions are generally deductible as promotion when the reason you enter is to win work. Framing a piece to hang in your own home is personal.
Contractors you bring in
Illustrators, retouchers, copywriters, motion designers, and developers you hire on a project are deductible when you pay them.
Collect a Form W-9 before the first payment goes out. If you pay an unincorporated contractor more than the IRS reporting threshold for the year, you have to file a Form 1099-NEC for that person by the deadline early in the following year, and late or missing forms carry penalties.
Driving for work
Press checks at the printer, client meetings and workshops, photo shoots, courier runs, and trips to the supply store.
Commuting is not deductible. If your home studio qualifies as your principal place of business, trips from there to a client can be business miles. Log the date, the miles, and the purpose. There are two ways to figure the deduction, a standard rate per mile that the IRS sets each year or your actual vehicle costs, and what you choose the first year the car is used for work limits what you can switch to later.
Platform and payment fees
Stripe and PayPal processing, marketplace commissions on Upwork, Contra, or Fiverr, invoicing tool fees, and wire or currency conversion fees on overseas clients.
A Form 1099-K reports the gross amount before fees were taken out. Report the gross as income and take the fees as an expense, or your return will not match what the IRS already has.
Conferences, courses, and dues
Design conferences, workshops, online courses that sharpen work you already do, professional memberships, and reference books.
If a trip is primarily for business, the travel can be deductible along with lodging and costs for the business days. Days you add on for yourself are not, meals are only partly deductible, and a companion's ticket is not deductible unless that person is there for a real business reason. Education that maintains or improves the skills of work you already do can be deductible. Education that qualifies you for a new trade or business is not.
Phone, internet, and storage
Dropbox, Google Drive, Backblaze, the archive drives, and the business share of your phone bill and home internet.
Choose a business use percentage you could defend, write down the basis for it, and use the same one all year. Deducting a whole family phone plan is not defensible.
Health insurance and retirement
If you are self employed, you may be able to deduct health insurance premiums for yourself and your family, and contributions to a SEP-IRA or a solo 401(k) can reduce your taxable income.
Both come off elsewhere on the return rather than on Schedule C, so neither one reduces self employment tax. The health insurance deduction cannot be more than the profit from your design work, and it is not available for any month you were eligible for a subsidized health plan through a job of yours or your spouse's. How much you can contribute to a retirement plan depends on the plan and on your profit, and the limits change each year, so we run that number once the books are closed.
Schedule C is where a freelance design business usually starts and it can stay there for a long time. The question only changes when your profit is consistently high enough that the self employment tax an S-corp election would save is bigger than what payroll, a reasonable salary, and a second tax return cost you.
What to bring us
You do not need all of it to start. Send what you have and your checklist shows what is still open.
- Every Form 1099-NEC and Form 1099-K you received
- Your own income total from invoicing records, including clients who paid by check or transfer and sent no form
- Business bank and card statements for the year, or a bookkeeping export
- Receipts for software subscriptions, font licenses, and stock or asset purchases
- Purchase dates and amounts for any computer, tablet, display, or camera gear bought during the year
- Home studio numbers: square footage of the space and of the whole home, plus rent or mortgage interest, utilities, and insurance
- Mileage log or app export, and the date you started using the vehicle for work
- What you paid each subcontractor, plus their Form W-9
- Health insurance premiums paid, and whether an employer plan was available to you or a spouse
- Records of any estimated tax payments you made during the year, plus last year's return
What trips people up
Adding up the 1099s and calling that your income
Small clients and anyone paying by check or bank transfer often send nothing. Your invoicing records are the real total, and that is the number that goes on the return. We reconcile the forms against it.
Waiting until April to think about it
Nothing is withheld from a freelance invoice. Estimated tax is generally due in installments during the year, and coming up short can add an underpayment penalty on top of the tax you already owed. There are safe harbors that avoid the penalty, and we set yours when we plan the year.
Calling the kitchen table a home office
The space has to be used regularly and only for business. It does not have to be a full room, but it does have to be an area you are not also living in, which is where the dining table fails. If you have space that qualifies, we take it and document it. If you do not, we leave it off and work the deductions that do hold.
Writing off a client who never paid
If you report income when you receive it, which is how a cash basis return works, an invoice you never collected was never counted as income, so there is nothing to deduct. The loss is real. The deduction is not.
Buying a machine in December to cut the bill
A deduction returns a portion of what you spend, never all of it. Buy the machine when the work needs it, and then we decide how to time the write off.
What it costs
Our published list, the same one everyone sees. Prices marked "from" are starting points, and your exact number is confirmed in writing before any work begins.
$0 is due today. You pay when you sign, or you can have your fee come out of your refund, so it can be $0 out of pocket.
Questions we get from your trade
Do I need an LLC to write off my expenses?+
No. As a sole proprietor you deduct the same business expenses on Schedule C with no LLC at all. An LLC is a state law matter, and a single member LLC is by default taxed on your personal return the same way it would be without one. Form one for the liability reasons if you want it, not for a deduction it does not create.
A client never sent me a 1099. Do I still report it?+
Yes. All of your income is reportable whether or not a form shows up. The forms exist so the IRS can check your number, not to define it. Send us your invoicing total and we match the forms against it.
Should I elect S-corp status?+
Sometimes, and only after the numbers say so. An S-corp can reduce self employment tax on part of your profit, but it means running real payroll, paying yourself a salary that is reasonable for design work, and filing a separate business return every year. Those costs come whether or not the savings show up, so the election only makes sense once profit is high enough to clear them. We run it both ways before you decide.
How much should I set aside from each payment?+
There is no single number. It depends on your profit, your other household income, your filing status, and your state. We look at your actual year, give you a set aside figure and the quarterly amounts, then adjust when your income moves. A separate savings account you do not touch is the part that makes it work.
My clients are in other states. Do I owe tax there?+
Sometimes. Where a client happens to be located does not settle it by itself in every state, but traveling there to work, or having property or people there, can create a filing requirement. State rules differ and some states reach further than others. Tell us where your clients are and where you actually worked from during the year, including stretches you spent living somewhere else.
I use my iPad for client work and for drawing on the couch. Can I deduct it?+
Yes, for the business share. Estimate the split honestly, note how you arrived at it, and keep the receipt. Mixed use gear is normal and deductible. Claiming a personal device at full business use is what causes trouble.
Let us take the tax part off your plate.
Tell us what you need and see your price. A real person on your team replies within one business day.