As an independent contractor, you set your own hours and work location, and you dictate the strategies you put into practice for your clients. However, as a true 1099, you don’t get all of the professional development perks that are available to corporate employees. The good news is that if you can make time for professional development, this is a great source of independent contractor tax deductions when it comes time to file your taxes.
Of course, you probably know that you can write off expenses like business insurance, which is what my company, Bunker, provides for independent contractors. And as this primer on freelance taxes, reminds you, expenses like rent, equipment, software and furnishings may be tax deductible for independent contractors.
But my colleagues at Visor, an online platform to simplify taxes, reminded me recently that professional development activities are also a great place to look for those independent contractor tax deductions. Which make sense because, as an expert in your field, professional development is a core component your long-term success.
1. Take online courses to build your freelance career
Course education was formerly a big time and monetary investment, often for an unknown return. Today (thanks internet!), online courses are available for just about any profession.
From short, single classes to longer sessions in a series, the web platforms are overflowing with paid and free options.
Visor tax expert, William Perez, says, “Independent contractors can deduct the cost of classes as long as those classes build upon and enhance the contractor’s professional skills. The rules can get tricky sometimes, so we encourage people to work closely with their tax advisor to see if they are eligible for the deduction.”
This article on e-learning websites for freelancers discusses the features of some of the best sources of online courses such as:
(That last one is really interesting because superstars in their fields teach the classes. Like Judy Blume teaching writing, for example.)
2. Network with a purpose
Whatever your offering or specialization may be, events are a great way to meet new people and learn new skills. By hosting an event for charity, you can gather people in the community, and all of your expenses for the event may be deducted!
Whether it’s writing thank you cards to military families, organizing a clothing or canned good collection for a local pantry or hosting an interviewing workshop for people trying to find a job, you can use your skill to benefit the community and increase your independent contractor tax deduction!
The options are endless.Some ideas include hosting a 5K, organizing a rummage sale, hosting a budgeting workshop. Better yet, you can share your expertise with your community and have the opportunity to give back!
3. Go to conferences
Conferences are a great way to take time away from the day-to-day, sharpen tools in your toolkit and grow your personal network.
Conferences are also a great way to earn certificates in your field that will enhance your knowledge and make you a more marketable independent professional. Many universities offer one day workshops, and industry associations have a host of options.
Here are a few conferences we found for some common independent roles.
Conferences for software developers
Conferences for restaurant-quality chefs
Conferences for photographers and videographers
Conferences for writers, editors, and translators
- The American Society of Journalists and Authors Conference
- BinderCon
- Translation and Disruption: Global and local perspectives
Related reading: How Many Different Freelance Careers Do You Know Of? We’ve Found Over 130 So Far
4. Travel for business and stay for pleasure
If you travel somewhere for business and extend your trip for pleasure, 100 percent of your airfare can be deducted if the main point of your trip was for business and your personal days don’t exceed the amount of time you were there for business.
Visor tax expert, William Perez, says “I advise clients they can deduct the portion of their trip that is business related but airfare for spouses or kids is not deductible. The hotel expense would be prorated. The most important thing is to be reasonable and deduct only the part directly related to the contractor’s business.”
So, when you research the conferences above, try a quick sort/filter to find some (warm!) locations you’d been yearning to visit.
- For all those IT consultants out there, check out the Gartner Tech Growth and Innovation Conference in sunny San Diego!
- For those Marketing consultants, check out this conference in Tampa, FL and stay for the beach!
Keep track of your independent contractor tax deductions
Traveling, giving back, learning a new skill and lowering your taxable income at the same time! Small business owners are the future of work. There are many ways to maximize your tax write-off benefit as an independent contractor that people are often unaware of.
Make sure to track your anticipated write-offs during the year and review with your tax professional. This might just be the push you need for that trip you have been wanting to plan.
Katie Deschler
Katie is the Marketing Specialist at Bunker, a marketplace for small business insurance, specifically focusing on insurance when it’s required by contract. Bunker is a fully licensed digital broker, providing tailored policies to contractors and small businesses, allowing them to simply and affordably comply with requirements from clients, landlords or other partners.
Thanks for this article about taxes. I love the idea of running an event for a charity as a way to network and I can write it off all while helping the charity. Really helpful. Just subscribed and will read more and learn more!
Thanks Susan. I know you do work as a graphic designer and that you do a LOT of pro bono work for nonprofits. If you have a second, let us know about your experience writing off that pro bono work. If I understand right, you can’t write off the hours, but you can write off any materials expense and any transportation expenses.