Tax deductions for contract workers
As a rule of thumb, it’s easiest to deduct business expenses that were used exclusively for your business or project. You will need receipts and records to validate the expenses, but you won’t have to calculate how much of the expenses to deduct — generally you can take 100%. Having separate bank and credit accounts for your business makes tracking these expenses even easier.
You may also be able to deduct a percentage of an expense used both for business and personal use. Here, you’re required to keep track of the percent of business use so you can accurately apportion the expense. Some equipment (also known as assets) purchased for your business may be depreciable, so you can spread out the expense deduction over the life of the asset.