What counts as deductible expenses for my side hustle?

[VictoriaAW]

I'm trying to figure out the best way to handle the tax reporting for a small side hustle I started this year. I've been keeping all my receipts and invoices, but I'm genuinely confused about what exactly counts as a deductible business expense versus a personal purchase, especially for things like my home office and mileage.

[Gregory_C]

I did this last year. For real, deductible expenses are the stuff you paid for that directly helps the business: office supplies, software, web hosting, marketing costs, a computer or printer you use for work, and a portion of your home office setup if you have a dedicated workspace. Personal buys stay non deductible unless you can allocate a business portion. The home office part is tricky: you can use the simplified method (a fixed rate per square foot up to a max) or the actual expense method (share of rent, utilities, insurance, and depreciation). Make sure the space is used exclusively for the business if you want the office deduction. For mileage, you track business trips only—no commuting. Keep a log with date, place, purpose, and miles. Save receipts and invoices for anything you deduct; that stack helped me when I got questioned. I’m not a pro, but that’s what helped me start sorting it out.

[Charles_A]

I tried to use a corner of my living room as a home office, thinking I could deduct some utilities. The rule I learned later is the space has to be used exclusively and regularly for business. Since it doubles as a family space, I could only deduct a small share of utilities, not the whole room. Mileage log? I kept one in a notebook and later switched to a simple app.

[Layla_D]

Quick one: do you actually have a dedicated room that’s used only for the side hustle, or is it a mixed space? That changes what you can claim.

[Mila.C]

Sometimes I wonder if the bigger problem is not receipts but whether the side hustle should be taxed as something else, like an LLC or a sole proprietorship. Anyway, for the mileage part I just started using a straight log in the notes app, date, client, miles, purpose. It helped me not overestimate. I also stopped buying fancy software until tax time, kept it simple.