If you are self-employed, understanding which expenses you can deduct is key to improving the profitability of your economic activity and avoiding penalties from the tax authorities. In this guide, from Tecem Abogados y Asesoreswe explain everything you need to know about deductible expenses for self-employed and how to manage them correctly.

What are deductible expenses?

Deductible expenses are those that you can subtract from your income when calculating the net yield of your self-employment activity. That is, they are costs directly related to the development of your professional activity, and their correct deduction allows you to pay less tax.

Tax legislation requires that the self-employed meet certain requirements for an expense to be considered deductible:

1. That it is linked to the economic activity.

2. That it is supported by documentation (legal invoice).

3. That it is recorded in the books of income and expenses.

Why is it important to know what expenses are deductible as a self-employed person?

Many freelancers miss out on tax savings opportunities due to ignorance or mismanagement of their expenses. Knowing exactly what you can deduct and how to do it will allow you to:

• Pay less IRPF or corporate income tax.

• Reduce the VAT taxable base (when applicable).

• Avoid errors and penalties in a tax inspection.

In Tecem Abogados, we have experts in tax advice for self-employed in Malaga to help you optimize your accounting and correctly apply every legally possible deduction.

Main deductible expenses for the self-employed

The following are the most common deductible expenses that you can include in your quarterly and annual tax return:

1. Supplies of the premises or dwelling

If you carry out your activity in rented premises or in your own home, you can deduct water, electricity, internet, gas or telephone expenses. In the case of the main residence, a percentage (usually 30%) is applied on the proportional part destined to the activity.

Rental expenses

The rent of the premises where you carry out your activity is 100% deductible if the contract is in your name as self-employed and is used exclusively for the business.

Office supplies and consumables

Everything necessary for your daily activity (stationery, toner, software, computer equipment, etc.) is included in the deductible expenses for the self-employed.

4. Vehicles and transportation

If the vehicle is used for professional activity, you can deduct both the acquisition costs and the fuel, repairs, insurance or taxes. However, the Tax Authorities are very strict on this point, so it is advisable to have the professional use well accredited.

5. Insurance

Liability insurance, medical insurance (up to a limit of 500€/year per person) and any other insurance related to the activity are deductible.

6. Training and subscriptions

Courses, seminars, educational platforms, professional books or subscriptions to specialized magazines are also deductible expenses for freelancers if they are directly linked to your activity.

7. Professional Services

Fees of lawyers, tax advisors, consultants or technicians who collaborate in your activity are fully deductible.

8. Financial expenses and bank fees

Commissions for account maintenance, interest on loans linked to the activity, POS, etc., can also be deducted.

Expenses you cannot deduct (or with limitations)

Not all expenses you pay as a freelancer are automatically deductible. Some are limited by law or are frequently disallowed by the IRS:

• Meals and diets without clear justification.

• Non-professional clothing, except for uniforms or mandatory attire.

• Vacations, leisure or personal gifts.

That is why it is essential to have specialized advice. At Tecem Abogados y Asesores, we review each type of expense with you and show you how to document it properly.

Key tips for correctly deducting your self-employed expenses

• Keep all invoices and make sure they are in your name, including your tax ID number.

• Avoid receipts: The tax authorities require complete invoices.

• Classify well the expenses in your accounting.

• Consult a tax advisor if in doubt about deductibility.

In addition to knowing what is legally tax-deductible, it is essential to keep a thorough control of the accounting and to keep all documentation up to date. A correct accounting organization not only facilitates tax declarations, but also avoids problems in the event of tax inspections. Often, small administrative errors can result in surcharges or penalties that could have been avoided with proper management.

On the other hand, it is common for doubts to arise as to how to apply certain tax criteria in the development of daily activities. In such cases, having a team of experts who offer constant support allows decisions to be taken with greater legal and economic certainty. The peace of mind of being well advised is undoubtedly a competitive advantage for those who manage their business alone.

Need help managing your deductible expenses as a freelancer?

At Tecem Lawyers and Advisors we have a team specialized in self-employed taxation in Malaga. We help you to:

• Maximize your legal deductions.

• Prepare your quarterly and annual returns.

• Comply with your tax obligations without errors.

Contact with Tecem Abogados y Asesores

Are you self-employed and have doubts about your deductible expenses? Call us or schedule an appointment from our website. We are in Malaga, and we offer you a personalized and professional attention.