Most freelancers overpay tax not because they're bad at accounting, but because they never categorized their spending. Here's every Schedule C line, what actually qualifies, and where people get it wrong.
| Schedule C line | What counts | Common mistake |
|---|---|---|
| Advertising | Ads, promoted posts, domain-bought traffic, printed materials | Forgetting ad spend paid on a personal card |
| Car & truck | Standard mileage rate (67¢/mile for 2024, 70¢ for 2025) or actual costs | Claiming commuting miles — those aren't deductible |
| Commissions & fees | Payment processor fees, marketplace fees, affiliate payouts | Missing the 2.9% Stripe/PayPal cut, which adds up fast |
| Contract labor | Anyone you paid $600+ for services (file a 1099-NEC) | Not issuing 1099s, then losing the deduction in an audit |
| Insurance | Business liability, professional liability, E&O | Claiming health insurance here — it goes on the 1040, not Schedule C |
| Interest | Business credit cards, equipment loans | Mixing personal and business card interest |
| Legal & professional | CPA fees, bookkeeping, attorney, contract review | Forgetting tax prep fees — they're deductible |
| Office expense | Supplies, paper, small equipment under your capitalization threshold | Deducting a laptop twice (as supplies and as equipment) |
| Rent / lease | Coworking, studio, equipment leases | Deducting home office rent here instead of on line 30 |
| Repairs | Fixing business equipment | Claiming improvements — those must be capitalized |
| Supplies | Consumables used up in the year | Bulk-buying inventory and expensing it all at once |
| Taxes & licenses | Business licenses, permits, state business tax | Claiming federal income tax — never deductible |
| Travel | Airfare, lodging, ground transport for business trips | Deducting a trip that's mostly vacation |
| Meals | 50% of business meals with a client or during travel | Deducting 100%, or claiming solo lunches |
| Utilities | Business-use share of internet, phone, power | Deducting 100% of a family phone plan |
| Home office | $5/sq ft up to 300 sq ft, or actual expenses × business % | Claiming a room that's also a guest bedroom |
| Software & subscriptions | SaaS, hosting, design tools, stock assets | Missing annual plans paid once — they're easy to overlook |
| Education | Courses that maintain or improve skills in your current business | Claiming education that qualifies you for a new career |
Category names follow the IRS Schedule C (Form 1040) lines. Not tax advice — confirm edge cases with a professional.
The IRS test isn't "is it for work" — it's "is it common and appropriate for this business". A camera is deductible for a photographer, not for a copywriter.
Mixed-use things (phone, internet, car, home office) are deductible only in proportion. Track the percentage once, apply it all year.
A deduction you can't document is a deduction you don't have. Amount, date, vendor, and business purpose — for anything above trivial.
1. Payment processor fees. If you take cards, 2.9% + 30¢ on $80k of revenue is roughly $2,350 of deductible expense that most people never enter.
2. The home office they're afraid to claim. The simplified method is $1,500 of deduction for one line of paperwork. The "it triggers audits" belief is a myth — an overstated office does, a legitimate one doesn't.
3. Mileage. The standard rate for 2025 is 70¢/mile. 5,000 business miles is $3,500. Most freelancers claim zero because they never logged it.
4. Annual subscriptions. Paid once, forgotten forever. Pull your card statement for the full year before filing.
5. The half-SE-tax deduction. Not a Schedule C line, but it reduces taxable income and most people miss it entirely.
Upload a CSV of your transactions — SoloLedger sorts them into these categories and shows your quarterly tax number.
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