Freelance Tax Deductions Explained
Learn how freelancers use business expenses and tax deductions to lower their taxable income compared to salaried employees.
Your Variables
₹
₹
₹
₹
5 years
1 years20 years
The Secret Weapon of Freelancers
One of the biggest advantages of being a freelancer (or independent contractor) over a W-2 salaried employee is the ability to write off business expenses.
Pre-Tax vs Post-Tax Spending
As an employee, you buy your laptop, internet, and office supplies with post-tax money. As a freelancer, these are business expenses purchased with pre-tax money, effectively lowering your total taxable income.
This means a $100,000 freelance income with $20,000 in valid deductions is only taxed on $80,000. Use the calculator above to compare the exact take-home pay of freelancing versus a traditional salary.