Schedule C Write-Offs: Ordinary & Necessary Expenses
'It's a write-off' is doing a lot of unearned work in most conversations about freelance expenses. A deduction doesn't make something free — it makes it cheaper by your marginal rate, and only if it qualifies at all.
Two words, and what a deduction is actually worth
The standard is that an expense be ordinary — common and accepted in your line of work — and necessary, meaning helpful and appropriate for it. Neither word means indispensable, and the test is judged against your trade rather than in the abstract.
Start with what a deduction is worth, because the phrase 'write-off' obscures it. A $1,000 deductible expense in the 22% bracket saves $220 of income tax, plus self-employment tax on the same amount for a Schedule C filer. You are still out of pocket for most of it. Buying something you didn't need in order to deduct it is a way of losing money more slowly.
Documentation is what makes a legitimate deduction survive scrutiny. Receipts, a clear business purpose, and a bank account that isn't also buying groceries — the mixing of personal and business spending is what turns a defensible position into an argument you can't win.
Your marginal rate, plus SE tax. Not the whole amount — a deduction is a discount, never a refund.
The home office rules, and the two that catch people
A home office is deductible if the space is used exclusively and regularly for business. Exclusively is the strict one: a spare room that doubles as a guest room fails, and so does the corner of a living room, however much work happens there.
The simplified method deducts $5 per square foot, capped at 300 square feet — a maximum of $1,500 — with no receipts to keep. The regular method apportions actual costs like rent, utilities and insurance by floor area, which often produces a larger number and requires records to match.
One ceiling catches new freelancers: the home office deduction can't exceed the gross income the business produced. It can reduce a profit to zero and no further — it cannot manufacture a loss to offset other income. The excess carries forward instead.
A deductible expense must be ordinary and necessary for the trade, and documented. The costs people most often get wrong are the ones that feel obviously work-related: commuting, and any space that isn't used exclusively for business.
Sources
- Publication 334, Tax Guide for Small Business (successor to the discontinued Pub 535) — Internal Revenue Service (2026)