Many independent contractors overpay simply because they never claim deductions they're entitled to — they don't track them, or don't know they exist. Here are 15 deductions you may be able to claim on your Schedule C.
If you use a space in your home exclusively and regularly for business, you can deduct a portion of your rent/mortgage, utilities, and insurance. The exclusive-use test is strict: a room that doubles as a guest bedroom or family space generally doesn't qualify. The simplified method lets you deduct $5 per square foot, up to 300 sq ft ($1,500).
Driving to job sites, supply stores, and client meetings is deductible. The IRS standard mileage rate changed mid-2026: 72.5 cents per mile for January 1–June 30 and 76 cents per mile for July 1–December 31. Track every trip — a contractor driving 20,000 business miles split across the year claims roughly a $14,850 deduction, depending on when the miles were driven. That's the deduction, not the tax saved: your actual tax reduction is that amount multiplied by your marginal rate, typically a few thousand dollars.
Everything from power tools to safety gear to your work truck is deductible. Under the de minimis safe harbor, taxpayers without an applicable financial statement can expense items immediately up to $2,500 per item or per invoice — but only if written accounting procedures treating such amounts as expenses were in place at the start of the tax year. Larger purchases can use Section 179 depreciation.
You can deduct 50% of your self-employment tax (the employer-equivalent portion). This is an above-the-line deduction — you get it even if you don't itemize.
If you're self-employed, you may be able to deduct your health, dental, and vision insurance premiums for yourself, your spouse, and dependents. The deduction is capped at your net self-employment income, and it isn't available for any month you were eligible to participate in a subsidized health plan through an employer — including one through your spouse's employer.
A Solo 401(k) or SEP-IRA lets you contribute up to $72,000 in 2026. These contributions reduce your taxable income dollar-for-dollar.
The business-use percentage of your cell phone bill and home internet is deductible. If you use your phone 70% for business, you can deduct 70% of the bill.
Invoicing software (like Fast Pay Books), accounting tools, project management apps, and cloud storage are deductible to the extent you use them for business. Services with substantial personal use generally aren't deductible, and a mixed-use subscription should be prorated to its business-use percentage.
General liability insurance, professional liability (E&O), workers' comp, and commercial auto insurance are fully deductible business expenses.
Trade certifications, licensing renewals, workshops, online courses, and industry conferences — if they maintain or improve your skills, they're deductible.
Website hosting, Google Ads, business cards, vehicle wraps, yard signs, and social media ads are all deductible marketing expenses.
Credit card processing fees, Stripe/PayPal fees, and business bank account fees are deductible. These add up quickly when you process a lot of payments.
Business meals with clients, subcontractors, or prospects are 50% deductible. Keep the receipt and note who you met with and the business purpose.
Anything consumed on the job — from PVC pipe to drywall screws to printer paper — is a direct business expense. Track every trip to the supply store.
Many contractors may qualify for the 20% QBI deduction under Section 199A. This means you may only pay income tax on 80% of your net business income. There are income thresholds, so check with your tax professional.
The key to maximizing deductions is tracking expenses in real time. If you wait until tax season to dig through bank statements, you'll miss hundreds of deductible expenses.
This article is general educational information, not tax advice. Tax rules change and depend on your specific situation — consult a licensed tax professional or CPA before acting on anything here.
Fast Pay Books categorizes your expenses as you go and exports tax-ready reports you can give to your tax professional. Snap receipt photos and track mileage along the way.
Start Free Trial →