The sun’s barely up, and there you are, coffee in hand, already sketching out your next big design, surrounded by velvets and sequins.

Millions of ideas racing through your mind while you forget to even have breakfast. You’re living the life of a freelance costume and fashion designer, which means your days are a mix of creativity and chaos. 

One minute you’re lost in a flow of designing the next showstopper, and the next, you’re scrambling to meet a deadline because a celebrity client decided they need their outfit yesterday.

And let’s not even talk about the endless cycle of fabric shopping, fitting sessions, and trying to keep up with fashion week invites! 

Sounds like a regular drill? Well, we get you. The life of a fashion designer or freelance costume designer can be both exhilarating and challenging. Amid all this chaos, your taxes are the last thing you want to worry about.

Yeah, I know, it’s not exactly the fun part of being your own boss.  Ugh. Taxes can feel like solving a rubik’s cube. Very overwhelming and exhausting. Don’t you agree?

So, wouldn’t it be nice to know that all those expenses you deal with every day can work in your favor? Because, at the end of the day, those savings add up, letting you invest more in your craft and fabric. 

So, let’s make sure you’re taking advantage of every tax write-off available to you so you can keep more of your hard-earned money where it belongs — in your pocket.

In this blog, we’ll break the write-offs down into seven different categories to keep things clear and detailed. 

Trust me, reading this list will make tax season a little less dreadful. 

Ready to save some money? Let’s dive in!

Category #1  Home Office Write-Offs

Home Office

What Does It Include?

This space must be used exclusively for your work. It could be a spare room, a dedicated corner, or even a well-defined part of your living room. Ensure it’s only used for business activities to qualify for this deduction.

Example: If your home office takes up 10% of your home’s total square footage, you can deduct 10% of your rent or mortgage, as well as utilities.

How to Apply?

Calculate the square footage of your home office and divide it by the total square footage of your home to get the percentage. Apply this percentage to your rent/mortgage and utilities. Use IRS Form 8829 (Expenses for Business Use of Your Home) to claim this deduction.

What Is Form 8829?

This form is used to calculate expenses for the business use of your home.

Utilities

What Does It Include?

Keep track of all your utility bills and calculate the portion that applies to your home office.

Example: If your home office is 10% of your home, you can deduct 10% of your electricity, water, and internet bills.

How to Apply?

Use the same percentage as the home office deduction. Include these expenses in IRS Form 8829.

Learn more about tax deductions: Can You Write Off Company Formation Fees?

Office Supplies

What Does It Include?

These are all necessary for your daily operations. Keep receipts and note which supplies are used for business purposes.

Example: Buying printer paper, ink, pens, notebooks, etc.

How to Apply?

Deduct the full amount of office supplies in the year they were purchased. Use Schedule C, Line 18 (Office Expenses) on your tax return.

What Is Schedule C?

This form is used by sole proprietors to report income and expenses.

What Is Line 18 (Office Expenses)?

This line on Schedule C is where you list expenses for items like office supplies.

Home Office Furniture

What Does It Include?

Desks, chairs, lamps, and other home office necessities.

How to Apply?

Deduct the full cost of home office furniture in the year they were purchased. Use Schedule C, Line 18 (Office Expenses).

Property Insurance

What Does It Include?

A portion of your rental or homeowners insurance used for your home office.

Example: Deducting 10% of your insurance premium if your home office takes up 10% of your home.

How to Apply?

Use IRS Form 8829 to calculate and report the business use of your home.

Water Bill

What Does It Include?

A portion of your water bill that is used for your home office.

How to Apply?

Use IRS Form 8829 to calculate and report the business use including water usage of your home office.

Category #2 Technology and Software

Software and Apps

What Does It Include?

Any software or apps that you use for your design work or business management can be deducted.

Example: Adobe Creative Suite subscription for designing, accounting software for managing finances.

How to Apply?

Deduct the full cost of software subscriptions in the year incurred. Use Schedule C, Line 27a (Other Expenses) or Line 18 (Office Expenses).

What Is Line 27a (Other Expenses)?

This line on Schedule C is used for miscellaneous expenses that don’t fit into other specific categories.

Phone and Internet

What Does It Include?

Internet and phone bills of your office

Example: If you spend 30% of your phone time and internet usage on business, you can deduct 30% of these bills.

How to Apply?

Calculate the business-use percentage and apply it to your total bill. Deduct this amount on Schedule C, Line 25 (Utilities).

What Is Line 25 (Utilities)?

This line on Schedule C is where you list utility expenses.

Category #3 Vehicle and Travel

Mileage

What Does It Include?

You can use the standard mileage rate (58.5 cents per mile for 2022) or actual expenses like gas and maintenance.

Example: Driving to fabric stores, client meetings, or fashion events. Keep a log of your business trips.

How to Apply?

Use a mileage log or app to track business miles. Multiply total business miles by the standard mileage rate. Report this on Schedule C, Line 9 (Car and Truck Expenses). You may also need to complete Part IV of Schedule C.

What Is Line 9 (Car and Truck Expenses)?

This line on Schedule C is where you list expenses related to your vehicle.

What Is Part IV of Schedule C?

This part of the form asks for details about your vehicle, including miles driven.

Vehicle Depreciation

What Does It Include?

The IRS allows you to depreciate the vehicle over several years, reducing your taxable income annually.

Example: Depreciating a car purchased primarily for business use.

How to Apply?

Use IRS Form 4562 (Depreciation and Amortization) to calculate annual depreciation. Report this on Schedule C, Line 13 (Depreciation).

What is Form 4562?

This form is used to claim depreciation and amortization deductions.

What Is Line 13 (Depreciation)

This line on Schedule C is where you list depreciation expenses.

Parking and Tolls

What Does It Include?

Paid parking at a client’s office or tolls while driving to a business event.

How to Apply?

Deduct parking fees and tolls on Schedule C, Line 9 (Car and Truck Expenses)

Category #4 Client and Professional Services

Client Gifts

What Does It Include?

Tthank-you gifts to clients, up to $25 per person per year. Keep receipts and a log of gifts given, noting the business purpose.

How to Apply?

Deduct client gifts on Schedule C, Line 27a (Other Expenses), up to $25 per client per year.

Legal and Professional Fees

What Does It Include?

Legal and accounting fees related to your business are deductible. Keep detailed records and invoices.

Example: Hiring a lawyer to draft contracts, paying an accountant for tax preparation.

How to Apply?

Report legal and professional fees on Schedule C, Line 17 (Legal and Professional Services).

What Is Line 17 (Legal and Professional Services)

This line on Schedule C is where you list expenses for legal and professional services.

Category #5 Meals and Entertainment

Business Meals

What Does It Include?

Lunch meetings with clients or colleagues.You can deduct 50% of the cost of business meals. Keep detailed records of who attended and the business purpose.

How to Apply?

Report business meals on Schedule C, Line 24b (Meals and Entertainment). Remember, only 50% of the cost is deductible.

Category #6 Travel Expenses

Transportation Charges

What Does It Include?

Flights, hotels, meals, and transportation are all deductible if the travel is business-related. Keep detailed travel logs and receipts.

How to Apply?

Deduct travel expenses on Schedule C, Line 24a (Travel) for transportation and lodging.

What Is Line 24a (Travel)

This line on Schedule C is where you list travel expenses such as transportation and lodging.

Category #7 Bank and Financial Services

Bank Fees

What Does It Include?

Any expense related to your bank account. It could be your monthly fees for a business checking account, transaction fees for credit card payments.

How to Apply?

Deduct bank fees on Schedule C, Line 27a (Other Expenses).

What Is Line 27a (Other Expenses)?

This line on Schedule C is used for miscellaneous expenses that don’t fit into other specific categories.

Who Can Help You in This Financial Journey?

Navigating tax write-offs can be tricky, especially if you’re new to the process. Here are some tax professionals who can help:

👩🏻‍💻 Certified Public Accountant (CPA): A CPA can provide comprehensive tax advice and help you file your taxes accurately, ensuring you claim all eligible deductions.

✍️ Enrolled Agent (EA): An EA is a tax advisor who is federally-authorized to represent taxpayers before the IRS. They can offer expert advice on tax matters and help with filing.

🏦 Tax Attorney: If you have complex tax issues or need legal advice related to your taxes, a tax attorney can be invaluable.

How Can doola Help You Keep More of Your Hard-Earned Money?

Navigating taxes doesn’t have to be as daunting as finding the perfect satin piece for that couture gown.

With the right advisor by your side, it’s practically effortless. You probably don’t need to break your head finding the professionals and tax experts we mentioned above.

With doola, you get an army of experts who will help you sail through the tax season smoothly.

Grab a free consultation today and experience the peace of mind that comes with our expert guidance and support.