Self Employment Tax Deductions for Graphic Designers

Last updated September 28, 2020

Working as a graphic designer has a lot of advantages, especially if you’re able to work from home as a freelancer with your own business.

This article will go over all the common tax deductions graphic designers can get on their tax returns, as well as the definitions you need to be able to tell which expenses can be used as tax write-offs, and which expenses can't.

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Why care about graphic designer tax deductions?

The short answer is graphic designers are eligible for a lot of tax deductions that can help them save money on business expenses and make the most of their business. 

If you’re going to use these tax deductions it’s important to know what kinds of expenses you can deduct from your taxes and which expenses aren’t eligible. 

We’ll cover everything you need to know, from the kinds of deductions that are available to how you can keep track of them and deduct them from your taxes.

Common graphic designer tax deductions

Below is a list of common expenses that graphic designers can deduct from their taxes. As with anything financial or tax-related, there is some nuance to what and how much you can write off, so be sure to consult with an expert.

💻   Electronics
Electronics are a little trickier but fall under the same set of qualifications as other business expenses. As long as you need the computer or other electronic device for work, its costs are tax-deductible.
🖥   Software subscriptions
Your software subscriptions are generally tax-deductible as long as there is a business reason you need them. That includes your graphic design software like Photoshop, GIMP, or subscriptions to stock photo providers, but it can also include Microsoft Word, and business management software.
✏️   Notebooks, pens, pencils
These kinds of supplies fall firmly under the realm of necessary office supplies. If you regularly use notebooks, pens or pencils, even if it’s just to take notes from training materials or to write down client comments, you can deduct the cost as necessary supplies for your job.
🖌   Art supplies
While most graphic designers do a lot of their work entirely digitally, that isn’t always the case. If your business requires you to buy and use physical art media, you can deduct the costs of those materials on your taxes.
⌨️   Website expenses
Especially if you're primarily working as a freelance graphic designer, it's important to have and maintain a website with a portfolio of your work, so website hosting and maintenance costs are generally accepted as tax-deductible expenses for graphic designers.
🏡   Office furniture costs
Working from home means that you need a space to work in. For most people that means a desk and a chair and all kinds of other furniture to help you stay organized and productive. Fortunately, this kind of furniture is considered necessary, which means that you can deduct the costs of (reasonable!) office furniture from your taxes.
🔌   Power bill
Working from home you need something to keep the lights on, and candles definitely won’t do. Since you need electricity to work, a portion of your home power bill is tax-deductible as a business expense.
🎚   Internet bill
The same logic applies to your internet bill as your power bill. Modern graphic designers need to have consistent wifi access for their business, which means that the cost of your internet bill is partially deductible as a business expense.
🚰   Water bill
Water is important for keeping a space habitable and safe to be in, which means that if water is on your home utility bill, a portion of those costs are tax-deductible as necessary costs for your home office.
🏚   A portion of your rent
If you pay rent on your home, and your office is located in your home, you can deduct a portion of that rent from your taxes, directly proportionate to the amount of space your office takes up in your home.
🏠   Property insurance
If you have homeowner’s insurance or rental insurance, a portion of that insurance is covering your home office and the furniture inside. That means that you are also eligible for a partial deduction on the cost of your property insurance.
⛽️   Gas
Driving from place to place can get expensive. So save your gas receipts and deduct this travel cost every time you’re traveling for business. Note: Traveling back and forth from your regular place of employment cannot be deducted from your taxes.
🛣   Parking costs
Parking in a city usually comes with high parking bills. Keep the receipts and deduct those costs from your taxes later.
🚗   Mileage
Your car's value decreases with increased mileage, so mileage is one form of vehicle depreciation you can deduct from your taxes anytime you drive your car for work travel. Gas and parking costs can be deducted even if you’re driving a rental car, as can the cost of the rental.
💰   Tolls
If you’re driving, gas and mileage aren’t the only costs you can expect. Tolls and other fees on your way to your destination can also be deducted, but not tickets or fines. So, drive safely, and go ahead and take the toll road if that's the fastest route.
🚘   Vehicle depreciation
Driving your vehicle causes it to depreciate faster, especially if you're traveling long distance. If you find yourself driving thousands of miles for a presentation, conference, or training opportunity, go ahead and calculate your vehicle depreciation and deduct it from your expenses.
👨‍🔧   Car maintenance
Your regular car maintenance isn't usually tax-deductible unless your car needs the maintenance for business travel. An oil change and tire alignment right before you take a big trip can count.
✈️   Plane tickets
If you're traveling long distances you might decide to fly instead of driving. Fortunately, the cost of your ticket is usually considered tax-deductible, just don't to fly first class every single time unless there’s a good reason to do so.
🏨   Hotel accommodation
Business-related travel often means staying in a hotel, and those extra costs can make it even harder to afford to go to the next big conference or professional networking event. Fortunately, hotel expenses are tax-deductible as a necessary business expense but only for business-related travel.
🌮   Meals while traveling
Packing food to take with you is an option, but most people go the easier route and grab food on the road. Regular meals while you’re traveling for business all count as business expenses. Just leave the cost of adult drinks and other extras off your business deduction.
📁   Business meals
If you’re meeting with clients at a restaurant, go ahead and deduct the meal from your taxes later. Just don’t offer to pay for drinks and expect to include those costs on your next tax return.
👨‍💻   Meeting space rental
Another miscellaneous cost for graphic designers that work from home are meeting space rentals for when you don’t want to bring clients to your home office, and you can’t go to their office either. Meeting spaces are often available for rental, and if your client doesn’t cover the cost then you can deduct it from your taxes.
📚   Conference and class costs
Professional development is important. If you were employed by a company they would likely pay for your professional development, which is why things like training, conferences, and graphic design classes are all tax-deductible for graphic designers.
👨‍⚖️   Creative assistant costs
Creative assistants can include a wide number of professions, from editors to people who help with parts of your graphic design production. If you have to hire someone else to help with your graphic design business you can likely deduct some of the cost of their wages and benefits as necessary business costs.
🏥   Health insurance
Any health insurance related costs can qualify as eligible tax write-offs for graphic designers, or design professionals in general.
💵   Commissions & fees
Legal fees, payment processing fees (PayPal, Stripe, and others).
If you decide that an online platform like Bonsai will make life easier by helping you manage your tax filing and accounting, the associated costs are also tax deductible for graphic designers.
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How to qualify if a graphic design expense is deductible or not?

Now that we looked at the specific tax write-offs you might apply for, let's talk about what counts as a business expense for a graphic designer.

There are two important bars any tax write off must meet. The expense must be both ‘ordinary’ and ‘necessary’ for your business.
Ordinary means that the expense must be something graphic designers commonly require. That means that your computer, keyboard, mouse, and even a drawing tablet might be considered ordinary expenses.

Necessary is a little trickier to define but is less limiting than it seems at first. Necessary doesn’t mean that the expense needs to be critical for your business to continue, instead, it refers to anything that's generally helpful or useful for your business.

For example, you might not need to meet up with your clients at a restaurant to discuss an important upcoming project. But, because business meals are both ordinary and necessary (common and helpful) for graphic designers, the costs of the meal can be written off on your taxes.

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What graphic design expenses are NOT tax deductible?

There are of course some expenses that you can’t include on your annual tax return. We're including this category because there are plenty of things that aren't tax-deductible because they aren’t necessary for your business. The adult drinks we mentioned in the earlier sections on business and travel meals, those are unnecessary expenses. A desk fountain for your home office is probably also unnecessary even though the desk it sits on isn’t. 

Just be reasonable about what you try to deduct and what you don't. If something is necessary, common, and business-related it's probably deductible. If it's a perk or extra you don't really need, and that doesn't contribute directly to your business success, it probably isn't.

Here are a few examples:

💲   Undocumented business expenses
You need to have a record of any expenses that you want to deduct on your tax return. Most of the time that means that you’ll need to have a receipt from the purchase. There are some ways to track down business expenses where the receipt was lost or damaged, but you do need to have proof of the purchase and how the item or service was used in case your tax return is audited.
⛽️   Gas and mileage to your regular office
Your regular office doesn’t qualify as a business travel destination. So, you can’t deduct the cost of mileage to your employer. You also can’t deduct the cost of travel to an office you’ve rented for yourself and use regularly. The only exception is that you can deduct toll costs, especially if the toll road is the only reasonable route to your place of business.
🍽   Non-business meals
Working as a graphic designer doesn't mean that you can deduct every meal when you're on business. Client meals and travel meals count, but your regular lunchtime soup and salad doesn’t. Neither does your morning Starbucks or any other meal you purchase in the normal course of work.

How can I use these graphic design tax deductions?

The first thing you need to do to avail graphic designer tax deductions is to keep track of them. You’ll also need a way to make sense of your possible deductions and to report them in a way that’s clear and easy to understand.

Here’s how you manage it:

   1. Using software

The easiest and most effective way to track and report your business deductions is to use business management and tax software like Bonsai Taxes. You input your business expenses and Bonsai handles organization and reporting so that it's easy to input your deductions.

There are plenty of options out there, but the combination of expense tracking and Bonsai’s tax calculator both make it one of the best options for freelance graphic designers and other creative professionals.

Sign up for a free trial of Bonsai today.

   2. Manually

The other option is to track and input your deductions manually, which means that you need to track your expenses and keep the deductions organized until Tax Day. You can also hire an accountant to help you understand your deductions and options, but both options take quite a bit of time and extra energy compared to tracking your expenses as you go.

Tax Deductions for Other Self Employed Workers

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