As a graphic designer in the United States you are eligible to claim certain reliefs when filing your taxes with the IRS. If you are a freelance graphic designer, you can be considered a sole-proprietor and would claim your deductions for certain expenses on a Schedule C (Form 1040). Any business expense is eligible for deduction under the IRS if it is considered “ordinary and necessary,” meaning they are common in graphic design and are helpful and appropriate for graphic designer.
A computer and other hardware equipment such as printers, monitors, etc. are eligible to be deducted by graphic designers. If the equipment is used solely for the business and no personal use, they are able to claim a full deduction. If the computer is used for personal use, it is still eligible to be deducted for a limited percentage. When filing their tax returns, you can depreciate the equipment over a number of year or just write-off the cost in the year it was purchased.
Additionally, fees for software subscriptions and licenses can be deducted. This includes subscriptions for design like Adobe Illustrator or Photoshop or subscriptions like Shutterstock. Subscriptions for programs used for customer resource management (CRM) like Dubsado or HoneyBook, project management software, and software used to share content with clients like Content share or Invision are also included. However, if a software license exceeds $1000, it may not be able to just be written off, but instead need to be depreciated over 3 years. Additionally, expenses relating to the purchase of graphics, fonts, or templates, may be deducted.
Expenses related to advertising may also be deducted. This includes any advertising or marketing done on social media like Facebook or Instagram and any costs related to building a website. Advertising expenses may also include any registration on sites where they have ads or marketing campaigns listed.
Graphic designers may also claim deductions for any educational or training courses. An educational expense or training course is only eligible to be claimed only if it is related to graphic design. An in-person course, online course, or webinar / online videos would qualify as an educational expense or training course, so long as they are in the graphic design field.
Additionally, graphic designers may also deduct other ordinary business expenses. Any fees for professional services like lawyers or accountants may be deducted. Office supplies like paper, pens, toner, and postage can be deducted. Bank charges and fees are considered an office expense and may be deducted. Internet fees, landline phones and cell phones, and fax lines may also be deducted as long as they are not used for personal use. Other business expenses that can be deducted include business insurance, payment processing fees, legal fees, email accounts and cloud based storage.
If you are self-employed, another deduction you may be eligible for is on health insurance. As long as you do not receive health insurance for your spouse, health insurance for you and any of your dependents is full tax deductible. This related to any medical, dental or long-term care insurance premiums.
If you have any business expenses related to traveling, entertainment, or meals. Travel expenses may not include commuting to and from work; however, they do include any trips to seminars or conventions, costs to meet clients, trips for research, or trips to build a work portfolio. Meals and entertainment must be during or directly before or after a business meeting. Meals may also be deducted when traveling, but it may only be on overnight trips.
Finally, if you work in a home-office you may claim that as a deduction. However, the IRS has strict regulation in order for a home office to be considered tax deductible. The home-office must be exclusively used for business and the principal place of business. It cannot be used for personal use at all. To calculate an in-home office deduction, you can claim 300 square feet at $5 per foot or $1500 per year. Another option for deduction allows you to deduct a percentage of home costs for mortgage interest, property tax or rent, insurance, utilities, and repairs.