Tech Deductions You Should Know for Your Freelance or Small Business
Tech Deductions
Both freelancing and operating your own small business can be incredibly rewarding. These things can also be a lot of work, and it’s important to track every expense and claim every deduction for which you qualify. Nearly every type of business has become reliant upon technology, and therefore it’s important to know what tech-related deductions you can claim. While we’ve noted before that a good CPA can help you maximize your tax return, we also wanted to share a few deductions you should always plan for each year.
Home office deduction
Although not specifically tech, odds are your home office takes advantage of a computer, fax, printer, and the internet. We’ve mentioned this elsewhere before, but it’s worth repeating since many freelancers and small business owners work from home, if not primarily then at least infrequently. Remember that the space you intend to claim must be used primarily and first and foremost for business (i.e., even if you work from your dining table on occasion, you cannot claim your dining room as part of the deduction). Deductions can also be extended to certain home costs, such as utilities.
Internet and phone costs
Internet and phone bill costs directly related to your business can be deducted from your tax liability. For example, if you have one phone that you use for work and personal use, you cannot deduct your entire bill. But if you have a second phone line that you use exclusively for business, you can deduct that entire bill.
Computer for business use
If you purchase a computer for business use, you can deduct the entire cost in a single year. In order to qualify, the computer must be for business use more than 50% of the time. However if you also use the computer for personal use, you can only deduct the percentage of time for which you use it for work. For example, if you use the computer for work 80% of the time, and use it to stream movies and play games 20% of the time, you can only claim 80% of the cost.
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