Best Tax Deductions for Gig Workers and Freelancers

As a gig worker or freelancer, there are a number of tax deductions that you can take advantage of in order to reduce your taxable income. 

In this blog post, we will go over the best deductions to take advantage of as a self-employed individual. 

That said, you should always speak with an accountant to get specific advice for your situation, as these deductions may vary depending on your location and occupation. 

Let’s dive into how self-employment taxes work first and foremost. 

How Taxes for Self-employed Work

As a gig worker or freelancer, you are considered self-employed. This means that you are responsible for paying your own taxes, which include both federal and state taxes. 

When you are “traditionally” employed by a company, your employer is typically responsible for withholdings taxes from your paycheck and remitting them to the government on your behalf. 

However, when you are self-employed, you are responsible for calculating and paying your own taxes. Usually, those taxes are paid in what is known as quarterly estimates, which helps to space out your tax obligations.

The silver lining of this extra work is that as a self-employed individual, you may be eligible for a number of tax deductions that can reduce your taxable income. 

Now let’s take a look at some of the best tax deductions for gig workers and freelancers…

Health Insurance

If you are self-employed, you can deduct the cost of your health insurance premiums on your taxes. This includes both a traditional health insurance policy as well as dental and vision coverage. 

The deduction is available for both you and your family as long as everyone is listed on your tax return. In order to qualify, you must have a policy that is in your name (not your spouse’s or partner’s), and you must pay the premiums with after-tax dollars. 

With the average monthly health care payments totaling $456 for an individual and $1,152 for a family, that can equal big tax savings!

Car Insurance

As a gig worker or freelancer, you can deduct the cost of your car insurance on your taxes. So, for rideshare drivers, namely Lyft or Uber, this can be a huge saving source. 

The amount that you can deduct will depend on what percentage of your car’s use is for business purposes. 

For example, if you use your car 50% for business and 50% for personal, then you can deduct a smaller percentage of your car insurance costs compared to a vehicle used solely for business.


Don’t get stuck fronting the bill on your marketing! You can usually deduct the cost of marketing and advertising your services on your taxes, as they are necessary to conduct business. 

This includes costs like design work, business cards, and online pr physical advertising. 

So, whether you’re printing a business card to distribute at local businesses or you’re running local ads online, your business is eligible to deduct some of that cost.

Phone Bills

If you have a phone solely used for business, you may be able to deduct the full amount of the associated bills. 

Alternatively, if you use a personal phone to also conduct business, you may be able to write off a portion of your bills

For example, if you use your cell phone 10% of the time for business, you may be eligible to deduct 10% of the costs! 

Keep in mind that a mixed deduction – that is, one that both serves personal and business functions – can be more complicated when tax time rolls around as detailed records are required.

Meal Deductions

If you’re traveling for business or entertaining clients, you may be able to deduct a portion of your meal expenses. 

In order to qualify, you must be able to prove that the meals were business-related. This means having a receipt that lists the date, time, location, and purpose of the meeting. 

You can deduct 50% of the cost of the meal as long as it is considered a “business expense” and can’t be too lavish. Again, the sole purpose of the meal should be for the purpose of generating or maintaining the business.

Business Travel

When traveling for business, you may be able to deduct the cost of your travel expenses. This includes airfare, hotels, car rentals, and even gas. 

The key is to keep all of your receipts and track your mileage if you are using your personal vehicle. You will need to be able to prove that the travel was for business purposes in order to qualify for the deduction. 

This is in regard to short trips, such as delivering in your personal vehicle but also attending events. 

So next time you’re interested in a convention or networking event that can benefit your business, keep in mind it may be deductible!


Software or other technology necessary in order to run your business may be eligible for deduction of costs. 

This includes things like accounting software, project management tools, and even website hosting fees. In order to qualify, the technology must be necessary for you to conduct your business. 

Memberships or monthly payments for tools that help you do your job – like SEO software or video editing tools – are typically eligible for deductions as well.

Rent or Mortgage

Sometimes referred to as a home office deduction, deducting a portion of your rent or mortgage that is strictly used for business is another popular deduction option. 

To be eligible, the space must be used regularly and exclusively for business.  

This means that if you have a room in your house that you only occasionally use for business purposes, you will likely not be able to deduct it from your taxes. 

The percentage of the deduction will depend on the size of the space used in relation to the size of your home.

The Bottom Line

Being a freelancer comes with a lot of responsibility but also a ton of potential, especially when it comes to earning and tax deductions. 

To help maximize your income as a gig worker, consider using these deductions to make your expenses work in your favor when tax time comes around. 

Whether you’re looking to save as much money as you can to prepare for the holidays or even want to plan a getaway, these tax deductions are a surefire way to get closer to your goal.

Happy freelancing!