Checkmark iconCan I Write This Off?

Can I write off freelancer marketplace fees?

TL;DR

Yes, freelancer marketplace fees are generally deductible as a business expense.

Detailed Answer

Freelancer marketplace fees, such as those charged by platforms like Upwork or Fiverr, are considered ordinary and necessary expenses for conducting business. These fees are deductible as they directly relate to the income-generating activities of a freelancer. However, the fees must be directly tied to the business and not for personal use. For example, if a freelancer pays a platform fee to acquire clients or process payments, this fee is deductible.

Where to Put It on the Tax Form

Schedule C (Form 1040), Line 27a - Other expenses

Real World Example

A freelance graphic designer pays a 10% fee to a marketplace platform for each project completed. If the designer earns $1,000 from a project, the $100 fee paid to the platform is deductible as a business expense.

Calculation Required

A calculation is required for this deduction.

Calculate the total fees paid to the marketplace platform over the tax year and report this amount as a business expense.

Audit Risk & Documentation Tips

Maintain detailed records of all transactions and fees charged by the marketplace platform. Keep copies of invoices, payment records, and any contracts or agreements with the platform. This documentation will support the deduction if questioned by the IRS.

IRS Reference

IRS Publication 535, Business Expenses

Relevant Industries

FreelancersSmall BusinessConsultantsGraphic Designers

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Disclaimer: This is for informational purposes only and should not be construed as tax or legal advice. Always consult your tax advisor.

Page created on July 7, 2025

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