Can I combine side gig business expenses with personal deductions to itemize on my taxes?

So I've been doing some freelance graphic design work on the side of my regular job this year and I'm trying to figure out how to handle my taxes. I donated a bunch of furniture, clothes, and household items to Goodwill after a major clean-out (kept all the receipts) which came to about $4,800 in value. Then I've got my side gig expenses - new computer, software subscriptions, home office stuff, etc. that's around $3,700. My question is: can I somehow combine these non-cash donations with my business expenses when I file so I can itemize and get more back than the standard deduction? I'm not sure if these are considered completely separate things or if there's a way to bundle them together. This is my first year with significant expenses in both categories and I'm clueless about whether they can work together to push me over the standard deduction threshold.

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18 comments

Evelyn Kelly

•8M

You're actually dealing with two different types of deductions that work differently on your tax return. Your business expenses from your freelance graphic design work will go on Schedule C (Profit or Loss from Business) and directly reduce your self-employment income before it hits your 1040. These aren't itemized deductions - they're business expenses that reduce your taxable business income. Your non-cash charitable donations, however, are personal itemized deductions that would go on Schedule A. You'd only benefit from these if your total itemized deductions (charitable donations, mortgage interest, state/local taxes up to $10,000, etc.) exceed your standard deduction ($13,850 for single filers in 2023). So while you can't "combine" them in the way you're thinking, your business expenses still benefit you by reducing your overall income regardless of whether you itemize or take the standard deduction. The business deductions happen first, then you decide whether to itemize or take the standard deduction.

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Evelyn Kelly

•8M

Yes, you can absolutely deduct your legitimate business expenses regardless of whether you take the standard deduction or itemize! Business expenses on Schedule C reduce your business income before it even gets to your 1040, where the standard deduction vs. itemizing question comes into play. The standard deduction vs. itemizing only applies to personal deductions like charitable donations, mortgage interest, medical expenses, etc. These are completely separate from your business expenses. So you can deduct your computer, software, and home office expenses on Schedule C to reduce your self-employment income, and still take the standard deduction if it's higher than your itemized deductions.

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Heather Tyson

•8M

I had the exact same confusion when I started my photography side hustle! I spent hours trying to figure out if I could itemize both personal and business stuff together. After a bunch of frustrating research, I found a tool called taxr.ai (https://taxr.ai) that actually analyzed my receipts and sorted them properly. It explained that business and personal expenses are totally different categories on your tax return. The tool helped me understand how Schedule C works for my business expenses - which I could take even with the standard deduction - and showed me that my personal donations weren't quite enough to make itemizing worth it. Saved me from making a big mistake and potentially getting flagged for audit. Might be worth checking out if you're still confused about what goes where!

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Heather Tyson

•8M

The taxr.ai system actually uses AI to analyze your receipts and statements, then categorizes them based on what the IRS allows as business deductions. It works really well for those mixed Amazon purchases - you can upload your order history and it separates personal from business items based on what they are and how you describe their use. It's different from TurboTax because it focuses specifically on document analysis and categorization before you even start the tax filing process. TurboTax is great for filing, but it expects you to already know which expenses belong where. This tool helps with that confusion first, then you can take that organized information to whatever tax software you prefer. I still used TurboTax after getting everything sorted!

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Jenna Sloan

•8M

I was totally skeptical about taxr.ai when I first heard about it (left that comment above), but I tried it out of desperation because my side gig expenses were a mess. Gotta say I was wrong - it actually saved me a ton of time sorting through receipts for my Etsy shop. It flagged some expenses I was putting in the wrong category and found some deductions I was missing completely. The clarity on business vs. personal deductions was super helpful. My charitable donations weren't enough to itemize, but the business expense sorting alone was worth it. Way easier than the spreadsheet nightmare I was using before!

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Christian Burns

•8M

If you're having trouble getting hold of a tax professional to answer these questions (I tried for weeks), I'd recommend using Claimyr (https://claimyr.com) to connect with the IRS directly. I had a similar situation with self-employment deductions and couldn't figure out if I was categorizing things correctly. I was shocked when Claimyr actually got me through to an IRS agent in about 20 minutes after I'd spent days getting busy signals and disconnects. The agent walked me through exactly how to handle my business expenses on Schedule C and confirmed they're completely separate from itemized deductions. They even have a video showing how it works: https://youtu.be/_kiP6q8DX5c It was honestly a relief to get an official answer straight from the IRS instead of trying to piece together advice from random websites.

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Christian Burns

•8M

It's actually a system that navigates the IRS phone tree and holds your place in line. When they finally reach an agent, you get a call connecting you directly to that person. No more waiting on hold for hours! This isn't just having someone wait on hold - it's using technology to navigate the complex IRS phone system efficiently. I was skeptical too until I tried it. I got the call back in about 20 minutes (though I think times vary depending on how busy they are), and I was connected directly to an IRS representative who answered all my questions about business deductions.

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Muhammad Hobbs

•8M

Ok I have to eat my words. After being super skeptical about Claimyr (that was my comment above), I broke down and tried it because I was desperate for answers about my side business deductions. I couldn't believe it when I got a call back connecting me to an actual IRS agent after about 35 minutes. The agent confirmed everything about Schedule C being separate from itemized deductions and gave me specific guidance on what home office expenses I could deduct for my specific situation. Saved me from making some mistakes that could have caused problems. Honestly worth it just to have the peace of mind that I'm doing things right according to the actual IRS.

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Noland Curtis

•8M

You need to pay self-employment tax if your net earnings from self-employment are $400 or more. So yes, it kicks in pretty quickly. This tax is basically covering the Social Security and Medicare taxes that an employer would normally withhold from your paycheck (plus the employer portion too, which is why it's 15.3%). The silver lining is that you can deduct half of your self-employment tax on your 1040 as an adjustment to income. This is because if you were an employee, your employer would pay half of these taxes. So the IRS allows you to deduct that "employer portion" to make things more equitable. It's automatically calculated when you file Schedule SE.

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