I Asked ChatGPT Which Tax Write-Offs Freelancers Should Claim This Season — Here’s What It Said
You never thought you’d dream of a W-2 form as if it were a luxury. Then again, for freelancers during tax season, anything that makes filing easier can feel like the stuff of fantasies. It’s no secret that filing taxes can be a little trickier for freelancers and gig workers than it is for people with traditional jobs. Unfortunately, many freelancers still remain in the dark about some of the tax write-offs that could potentially lower their tax bills.
Read More: The Side Hustler’s Guide to Paying Taxes Without Crying (Much)
For You: 5 Signs You’re Losing Money Every Month — and How To Find the Leaks
Determined to learn more about which tax write-offs freelancers should claim this season, I consulted ChatGPT. Here’s what the AI suggested — and why these deductions may be worth discussing with your tax preparer.
1. Home Office Deduction
For freelancers, their home is more than just a place to live — it's also where they run their business. If they use part of their home regularly and exclusively for business, they may be able to deduct a portion of their housing costs.
The AI offers two ways to calculate the deduction:
Simplified method: $5 per sq. ft. (up to 300 sq. ft., or a maximum of $1,500) Actual expense method: A percentage of certain home expenses may be deductible, including:
A portion of rent or mortgage interest
Utilities
Insurance
Property taxes
Home repairs related to the office space
If you’re a remote W-2 worker hoping to claim this deduction, ChatGPT offered a word of warning: “Only self-employed workers qualify (not W-2 remote employees).”
2. Qualified Business Income Deduction
The Qualified Business Income (QBI) deduction allows eligible self-employed people and small-business owners to deduct up to 20% of their qualified business income on their taxes.
The AI didn’t give a lot of information on this topic, so I did extra research — a reminder that AI tools are helpful, but they don't always provide the full picture.
The Jackson Hewitt website explains this deduction well: “For those who do not speak IRS, that essentially means your net income from eligible business activities. This includes what you make from businesses you own, as well as some money from trusts.”
However, the deduction does not apply to:
W-2 wages
Capital gains or losses
Dividend or interest income
Income earned outside the United States
Jackson Hewitt also notes that the QBI deduction is one of the most common tax breaks available to self-employed workers, though eligibility can depend on income thresholds and other factors.
3. Half of Self-Employment Tax
Freelancers pay 15.3% in self-employment tax on earnings of $400 or more, which covers Social Security and Medicare contributions.
But ChatGPT did have some good news: Self-employed taxpayers can deduct half of their self-employment tax when calculating their adjusted gross income. This doesn't reduce the self-employment tax itself, but it can lower the amount of income subject to federal income tax.
4. Software and Subscriptions
You’re incredibly talented at what you do, but unless you’re using an abacus to help balance your budget, you likely rely on digital tools to help run your business. From the design program that helps create your marketing materials to the accounting software that allows you to balance the books — if you use these tools for your business, they may qualify as deductible business expenses.
ChatGPT offered a few examples:
Design software
Project management tools
Accounting software
Cloud storage
AI tools
“These are considered 100% business expenses,” said ChatGPT. So, save those receipts.
5. Retirement Contributions
Smart full-time freelancers don’t rely on winning the lottery or inheriting a villa in Italy from a long-lost relative to fund retirement. Instead, many contribute to tax-advantaged retirement accounts designed for self-employed workers.
Examples include:
SEP-IRA
Solo 401(k)
SIMPLE IRA
“These contributions reduce taxable income and can be quite large compared to traditional IRAs,” said ChatGPT.
Depending on the plan and income level, freelancers may be able to contribute far more than the standard IRA annual limit, which can make these accounts a powerful tax-planning tool.
The Bottom Line
Ideally, savvy freelancers should sit down with a qualified tax professional to review their specific situation and identify the deductions they may be eligible to claim.
Still, ChatGPT highlighted several common tax breaks that freelancers often overlook — and keeping track of these expenses throughout the year could help make tax season a little less stressful and potentially less expensive.
This article was provided by MoneyLion.com for informational purposes only and should not be construed as financial, legal, or tax advice.
More From MoneyLion: