Common tax deductions for consultant travel expenses. Many consultants spend a lot of time traveling to meet with clients. Financial consulting fees are often classified as “professional services.” This spending category covers a wide range of financial consulting services, including financial planning, investment counseling, and tax preparation. At the end of the first year of self-employment, consultants quickly discover that their income is taxed differently from that of an employee.
To compensate for this situation, freelance consultants also have the advantage of claiming much more expenses. The definition of consulting expenses can refer to a variety of typical business expenses, such as travel, home office, insurance policies, and supplies. The cost of public transportation is deductible, but you must follow the same guidelines as car-related expenses. That is, you can't deduct the trip home and back.
However, you can deduct work trips taken from one workplace to another. Just remember that “advertising doesn't apply to things like gifts, food for holiday parties, or anything that doesn't have a brand. How can you increase your consulting fees and get customers to accept higher rates? The correct expense category will vary depending on the nature of the business and the specific services provided by the consultant. Whether you're a new consultant or have been working in the industry for years, pricing your consulting services is one of the most challenging aspects.