Freelance Designer at $50K

Income: $50,000

Tax Savings: $4,200

Sarah, a freelance graphic designer in her second year of self-employment

Sarah earns $50,000/year from client work, works from home, and drives to occasional client meetings. She uses Adobe Creative Cloud and various design tools.

Deduction Breakdown

Home Office

200 sq ft office at $6/sq ft simplified method

$1,200

Software

Adobe CC ($55/mo × 12)

$660

Equipment

New MacBook Pro (Section 179)

$2,500

Mileage

2,000 business miles × $0.725

$1,450

Health Insurance

Self-employed health insurance premium

$4,800

SEP IRA

Retirement contribution (12% of net)

$6,000

Total Deductions

$16,610

Key Takeaways

•Home office deduction is easy with simplified method
•All software subscriptions are 100% deductible
•Section 179 allows immediate equipment write-off
•SEP IRA reduces both income and future tax burden

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AlphaTax Features Used

Home Office Calculator

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