The Section 179 deduction for freelancers lets you write off the full cost of business equipment in the year you start using it, instead of spreading it over several years. Software subscriptions are even simpler: they’re ordinary expenses you deduct as you pay them. And items up to $2,500 each can usually be deducted right away under a separate rule.
In short, most freelancers can deduct almost every tool they buy in the same year. For the full list of what else you can write off, see our guide to freelancer tax deductions.
Software and subscriptions: deduct them right away
Monthly or yearly subscriptions, such as design apps, accounting software, cloud storage or a website builder, are ordinary business expenses. You deduct what you pay each year, with no special rules.
- Mixed use: if you also use a subscription personally, deduct only the business share.
- Bought software: a one-time license for off-the-shelf software can go under Section 179 or bonus depreciation, so you can usually deduct it in full as well.
- Related costs: the same logic applies to your phone and internet bills, in proportion to business use.
Small equipment: the $2,500 rule
For smaller purchases, you don’t even need Section 179. The IRS de minimis safe harbor lets you deduct items that cost up to $2,500 each, or per invoice, as ordinary expenses.
That covers most monitors, tablets, chairs, microphones, printers and many laptops. To use it, attach a short statement to your tax return each year saying you elect the de minimis safe harbor. Most tax software adds it for you.
Bigger equipment: Section 179 vs bonus depreciation
For equipment over $2,500, you have three ways to deduct it:
| Method | How much you deduct in year one | Key rule |
|---|---|---|
| Section 179 | Up to 100% | Can’t be more than your business income for the year |
| Bonus depreciation | 100% for property bought after January 19, 2025 | Applies automatically unless you opt out, and can create a loss |
| Regular depreciation | A part each year | Spread over 5 years for computers, 7 for furniture |
For most freelancers, Section 179 and bonus depreciation give the same result: the full cost deducted this year. Section 179 is more flexible, because you can choose exactly which items and how much. Bonus depreciation helps if your profit is low, since it can push you into a loss. The IRS explains both in Publication 946.
2026 Section 179 deduction limits for freelancers
| Limit | 2026 |
|---|---|
| Maximum Section 179 deduction | $2,560,000 |
| Phase-out starts at total equipment purchases of | $4,090,000 |
| Bonus depreciation | 100% |
These limits are far above what any freelancer spends, so in practice the only limit that matters is your business income.
The business-use rule
You can only deduct the business share of anything you also use personally. To use Section 179, the item must be used more than 50% for business.
Some items, called listed property, face extra scrutiny. They include cars and gear often used for fun, such as cameras. For these, keep a simple log of business use. If business use later drops to 50% or less, you may have to pay back part of the deduction.
Example: how the Section 179 deduction helps freelancers
Ana is a freelance designer in the 22% bracket. In 2026 she buys:
| Purchase | Cost | Business use | How she deducts it | Deduction |
|---|---|---|---|---|
| Laptop | $3,200 | 90% | Section 179 | $2,880 |
| Monitor | $600 | 100% | $2,500 de minimis rule | $600 |
| Design app | $55 a month | 100% | Ordinary expense | $660 |
| Total | $4,140 |
Because these are business expenses on Schedule C, they lower both her self-employment tax and her income tax. Together, that saves Ana roughly $1,430 this year.
How to claim the Section 179 deduction for freelancers
- List each item with its cost, purchase date and business-use percentage.
- Fill out Form 4562 for anything under Section 179 or depreciation.
- Enter the total on your Schedule C, line 13, for depreciation and Section 179.
- Put subscriptions and small items on the right expense lines, such as office expense or supplies.
- Attach the de minimis statement if you used the $2,500 rule.
Keep receipts for at least 3 years after you file, and for as long as you’re depreciating an item.
Should freelancers buy equipment before December 31 for the Section 179 deduction?
Only if you actually need it. A purchase counts for 2026 only if the item is placed in service, meaning set up and ready to use, by December 31. Ordering it isn’t enough.
Also, remember that a deduction only gives back part of what you spend. In Ana’s case, $1 of equipment saves her about 35 cents. Spending $1,000 just to save $350 in tax still leaves you $650 poorer.
Common freelancer purchases and how to deduct them
| Purchase | Typical rule | Where it goes on Schedule C |
|---|---|---|
| Design, editing or accounting software (subscription) | Ordinary expense, business share only | Other expenses (line 27b) |
| Cloud storage, website hosting, domain | Ordinary expense | Other expenses or advertising |
| Monitor, keyboard, microphone, printer | $2,500 de minimis rule | Office expense or supplies |
| Phone | De minimis rule or Section 179, business share | Supplies, or line 13 if depreciated |
| Laptop over $2,500 | Section 179 or bonus depreciation | Line 13, with Form 4562 |
| Camera and lenses | Section 179, with a business-use log | Line 13, with Form 4562 |
| Desk and office chair | De minimis rule if under $2,500 each | Office expense |
Section 179 also works for used equipment, as long as it’s new to you. So a second-hand camera body or a refurbished laptop qualifies too.
You don’t need a home office to deduct equipment
Many freelancers think equipment depends on the home office deduction. It doesn’t. A laptop you use for client work is deductible even if you work from the kitchen table. The home office rules only cover the space itself, such as rent, utilities and insurance.
Likewise, your phone and internet bills follow their own rule. Our guide to the phone and internet deduction shows how to work out the business share.
What happens when you sell old equipment
Writing off the full cost now has one catch. If you later sell an item you fully deducted, the sale price is usually taxable income, up to the amount you deducted. The IRS calls this depreciation recapture.
For example, say you deducted a $3,000 camera in full and sell it two years later for $1,200. That $1,200 is business income for that year. On the other hand, if you give it away or it simply wears out, there’s nothing to report.
Check your state’s rules
Not every state follows the federal rules. California, for example, caps Section 179 at $25,000 and doesn’t allow bonus depreciation. In those states, your state deduction may be spread over several years, even when your federal one isn’t.
Good tax software tracks both versions for you. Still, keep a simple asset list with the date, cost and business share of each item. That record also makes filling out Schedule C much faster next year.
4 mistakes to avoid
- Deducting 100% of a mixed-use item. If you use your laptop 30% for personal things, deduct 70%.
- Forgetting the de minimis statement. Without it, the $2,500 rule doesn’t apply that year.
- Claiming gear bought in December but set up in January. It belongs to the year it’s placed in service.
- Throwing away receipts. Keep them for as long as you deduct the item, plus three years.
Frequently asked questions
Can I take Section 179 if my business had a loss?
No. Section 179 can’t be more than your business income for the year, though any unused amount carries forward. Bonus depreciation doesn’t have this limit, so it’s usually the better choice in a loss year.
Do I deduct a laptop I already owned before freelancing?
You can, but not at its original price. You depreciate it based on the lower of what you paid or its value when you started using it for business, times your business-use share.
Which freelancers get the most from these rules?
Anyone with expensive tools, such as designers, video editors, photographers and developers. Our guide to tax deductions for graphic designers shows a full example for a creative business.
This article is for general information only and is not legal, tax or financial advice.