As a creative, when the time comes each year to do your taxes, managing all the tax deductions and write-offs that apply to your business can be overwhelming.
There are so many deductions available to creatives and small businesses, so it’s really easy to overlook some of them.
To help make tax time easier for you this year (and more profitable!), we’ve put together a list of tax deductions for creatives and small businesses so you don’t miss out on any savings.
While this guide has been written with US tax deductions in mind, these deductions can apply broadly to many other countries’ tax returns too.
We’ll explore expenses for creatives and small businesses related to:
- Digital properties, such as software, website, and marketing fees
- Bills and utilities, like internet and utilities for your home office
- Fees and payments, such as insurance and or retirement contributions
- Goods and services purchased for business purposes
- Transportation, whether around town or for travel
Let’s walk through the common expense categories you’ll use on your tax return.
Note: This is not official tax advice. Please consult with a certified accountant in your country before claiming any of these expenses on your taxes.
Digital Tax Deductions
Here are common tax deductions you may come across related to online or digital expenses. It’s important to distinguish that if any of these digital services you use for personal reasons only—these can’t be claimed on your tax return.
1. Advertising, marketing and websites
For creatives, it’s a given that you’ll spend money on running a website or advertising your business.
Luckily for you, there are a number of expenses you can claim around marketing yourself, whether through advertising, marketing, or website costs. Some of these include:
- Social media ads
- Traditional print ads
- Domain costs
- Monthly or yearly subscriptions to sites like Squarespace, WordPress or Shopify
So don’t be afraid of incurring upfront expenses in these areas. They help you build your business and the expenses can be written off.
2. Digital Downloads
Another expense you’re bound to come across as a creative are digital downloads. If you download and purchase content for creating graphics or populating your website, you can lump these together and call the expenses Digital Downloads.
Examples of these include:
- Stock photos
- Other digital images for business use
Whether it’s software suites or online subscriptions, this category can include any software for which you pay a monthly or annual fee.
Some examples could be:
- Cloud storage like Google Drive, Dropbox or OneDrive
- Other Google apps for your business
- Adobe Creative Suite
- Microsoft Office
- Digital or premium subscriptions like Canva or LinkedIn
Tax Deductions for Bills and Utilities
From connecting with clients to just keeping the lights on, there are several bills and utilities you can claim as a creative for your small business.
4. Cell phone
If you use your cell phone to do your work, this can be claimed too.
Most small business owners and creatives have one cell phone they use for both business and personal purposes. The cost of your phone and the monthly charges can be split up based on an estimate of how much you use your phone for business purposes.
5. Home office utilities
Have a dedicated space in your home for conducting business? This is something you can claim to reduce the ultimate cost of your electricity and heating/cooling.
If you own your home, you can also deduct a portion of your mortgage interest or homeowners insurance.
These costs will depend on the size of your office or workspace. You’ll need to calculate the square footage of your space, then claim that percentage of the total square footage of your home. For example, if your office space takes up 10% of your home, then 10% of your total utility costs for the year are tax deductible.
Just like with home office utilities, you can claim your internet service you use for your small business, which may be deductible as either a utility or office expense.
However, just like if you have a cell phone only partially for work, if you also use your internet service for personal use, you should only deduct the estimated portion used for business.
Fees and Payments
There are lots of costs small and large that can add up for creatives related to regular payments that aren’t related to utilities. Here are some examples you may be able to claim.
7. Commissions and Fees
If you have affiliate payments, this is where you can claim them on your taxes.
Some examples of these may include:
- Merchant processing fees
- Service fees
If you’re self-employed and pay for your or your family’s health insurance, you may be able to deduct your premiums to ease the burden of these payments. These can be claimed as a deduction against your personal income.
On top of that, if you pay liability insurance or any other insurance to protect your business, this can also be deducted.
9. Loan Interest
If you’re trying to get your small business running and have a bank loan or accrued credit card interest, this might qualify as a business expense tax deduction.
Once again, only the business portion of your loan’s interest can be deducted if a loan is for both personal and business purposes. So, unfortunately your personal credit card debt can’t be claimed.
10. Retirement Contributions
Creatives or are self-employed often don’t have the luxury of a company retirement plan like a 401k. However, preparing for retirement should be on your mind if you have a 401k or not!
Luckily, you may be able to set up a SEP IRA, SIMPLE IRA, or solo 401k as a self-employed worker or small business owner to save for retirement. Any contributions you make to a SEP IRA can be deducted on your tax return for a nice return at tax time!
However, it’s important to be mindful of your annual contribution limit, which can vary by plan.
11. ‘Other’ Expenses
In this category, if you have any business-related expenses that aren’t placeable in any other category or mentioned in this article, you can make up your own sub-categories of expenses.
Tax Deductions for Goods and Services
As a creative, you could buy many different things for your business, whether it’s something as big as an asset like a laptop, or something as small as pens and paper. On top of that, you may need the services of other professionals like you to keep your business afloat.
Here are some examples of tax deductions that may apply to you based on various goods and services you may encounter over the course of the year.
While it seems logical that you should be able to deduct an outfit you only wear for shooting weddings or speaking at events, unfortunately most clothing won’t qualify as a business expense.
However, if your clothing purchase satisfies the requirements found in the IRS Publication 17, then it can be deducted. If not, consider it a personal purchase. Some of these requirements include that the clothing:
- Must be specifically required by your employer
- Must not be suitable for taking the place of your regular clothing
13. Contract labor
If you pay any other creatives like yourself or contractors to conduct your business, the total amount paid to them goes under the Contract Labor category.
Some of these could be:
- Second shooters
- Virtual assistants
14. Education and conference expenses
Have you incurred expenses to educate yourself and improve your business? These can be deducted as a business expense.
- Books, whether e-books or physical books
- Online courses
- In-person conferences
- Any other educational expenses
15. Home office equipment and supplies
Any home office equipment or supplies you purchase for business purposes should be claimed on your taxes.
You’ll usually want to classify any equipment that will be used for a year or more as assets on your tax return. These are substantial expenses that will usually last you quite a few years. A few examples of assets are:
- Cameras or lenses
For these items, you can report the asset’s depreciation as a deductible expense.
You may also be able to deduct the cost of smaller office supplies bought for business use, like paper, pens, printer cartridges, and so on.
16. Legal or accounting services
If making sense of legalese or tax deductions beyond the basics is too much for you and you hire a lawyer or accountant for business, any fees that you may have paid in the last year can go into this category.
This includes fees for tax advice or the preparation of the business portion of your taxes.
17. Meals and entertainment
Within reason, food or drink expenses incurred while having a business meeting are deductible business expenses. You should record the expenses at their full cost in your bookkeeping, and on your tax return, report them at 50% of the total cost.
However, if you’re just going to a coffee shop to get out of the house and get work done, those expenses unfortunately aren’t deductible.
18. Repairs and Maintenance
Any expenses related to repairing or maintaining your equipment or office space would go into this category of your tax return.
For example, if you’re a photographer and you send your camera to the shop to get calibrated and cleaned, you can claim the maintenance cost under this category.
Transportation Tax Deductions
If it’s driving from client to client or travelling for business, these are all deductions you can claim on your tax return.
19. Car or truck expenses
If you use a vehicle for work, it’s important to be meticulous about the use of your vehicle, especially if you use it partly for personal use as well.
This category is where you’d report either your total mileage on the vehicle for business purposes for the year or the business percentage of all your auto expenses.
In addition to business miles traveled or auto expenses, you can also deduct business travel expenses.
These include things like:
- Taxi fare
- Airline or train tickets
- Hotel costs
- Luggage fees
Maximize Your Tax Deductions—You Deserve It!
Still feeling a little unsure about when/how to claim your expenses as tax deductions? Try not to get too hung up on what category to choose for each expense.
The IRS is most concerned with making sure that you’re reporting all of your income and you aren’t over-reporting your expenses. So as long as you stay within those bounds, your tax return shouldn’t be too tricky.
However, while these are the deductions most commonly asked about, there are many more deductions available to creatives and small business owners. So, when trying to decide whether or not something is a business expense, think about whether it helped you to run your business or make your business better.
Lastly, don’t be afraid to ask for help from an expert when needed! But, hopefully this guide makes you feel more comfortable when the time comes to file your tax return, and with more money in your pocket, too!