📋 SCHEDULE C REFERENCE · 2026

Freelance Business Expenses List

A complete 2026 reference of deductible business expenses for US freelancers, 1099 contractors, sole proprietors, and single-member LLCs. Organized by IRS Schedule C line item with notes on what counts, what doesn't, and how each line interacts with the 15.3% self-employment tax. Use it as a year-end audit checklist.

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The IRS standard: ordinary and necessary

An expense is deductible on Schedule C if it's ordinary (common in your industry) and necessary (helpful and appropriate for your business). It doesn't have to be indispensable. Personal expenses are never deductible; mixed-use items are deductible only in their business-use percentage.

Schedule C line items (2026)

Line 8 — Advertising

Line 9 — Car and truck expenses

Two methods: standard mileage rate (70¢/mi for 2026) or actual expenses. Most freelancers use standard mileage. See the dedicated mileage deduction calculator for details.

Line 10 — Commissions and fees

Line 11 — Contract labor

Line 13 — Depreciation and Section 179

Line 14 — Employee benefit programs

Only if you have W-2 employees. Most solo freelancers skip this line.

Line 15 — Insurance (other than health)

Line 16 — Interest

Line 17 — Legal and professional services

Line 18 — Office expenses

Line 19 — Pension and profit-sharing plans

For employee plans only. Self-employed retirement contributions (Solo 401(k), SEP-IRA) are deducted above the line on Schedule 1, not here.

Line 20 — Rent or lease

Line 21 — Repairs and maintenance

Line 22 — Supplies

Line 23 — Taxes and licenses

Line 24a — Travel

Line 24b — Deductible meals (50%)

Line 25 — Utilities

Line 26 — Wages

For W-2 employees only. Subcontractor payments go on line 11, not here.

Line 27a — Other expenses

Anything that doesn't fit other lines but is still ordinary and necessary:

Line 30 — Home office (simplified method)

$5/sq ft, capped at 300 sq ft = $1,500 max. See the dedicated home office deduction guide. For actual-expense method, file Form 8829.

Above-the-line deductions (Schedule 1, not Schedule C)

These reduce federal income tax but NOT self-employment tax:

What does NOT go on Schedule C

Year-end checklist

Before December 31, walk through every line above. For each one, ask: "Did I have any expenses in this category this year?" Even modest amounts add up — $200 in software here, $150 in courses there, $400 in payment-processor fees. Schedule C deductions reduce both federal income tax and the 15.3% self-employment tax, so $1,000 in caught deductions typically saves $300–$450 in combined federal tax.

Substantiation rules

Business expenses FAQ

What can freelancers deduct as business expenses?

Any expense that is ordinary and necessary for your business. This includes home office, mileage, software, equipment, marketing, professional services, business insurance, and dozens more. Schedule C expenses reduce both federal income tax and the 15.3% self-employment tax.

What's the difference between supplies and equipment?

Supplies are consumed within a year (fully deductible immediately). Equipment lasts longer than a year. Items under $2,500 can be expensed immediately under the de minimis safe harbor; larger items can be expensed under Section 179 (up to $1,160,000 for 2026).

Are meals deductible?

Business meals are 50% deductible. The meal must have a clear business purpose. Solo meals while traveling for business are also 50% deductible. Personal entertainment was eliminated by the TCJA.

Can I deduct my entire phone or internet bill?

Only the business-use portion. If 60% of your phone use is business, deduct 60% of the bill. Keep a brief written record of how you arrived at the percentage.

Do I need a separate business bank account to deduct expenses?

Not legally required, but strongly recommended. A separate account makes record-keeping clean, simplifies bookkeeping, and is the single biggest audit-protection step a freelancer can take.

Compare with related references

Drill deeper: the best 1099 deductions reference (ranked by impact), the home office deduction, the mileage deduction calculator, the self-employed health insurance deduction, and how to lower self-employment tax.

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Last updated: January 15, 2026. Disclaimer: Educational reference only. Not tax or legal advice. Consult a licensed CPA before filing. Source: IRS Schedule C (Form 1040) and Publication 535.