How I Reduced My Tax Burden in 2025 as a Tech Professional

As a freelance developer and part-time startup consultant, 2025 felt like the year my income exploded — and so did my tax stress. The more I earned, the more I owed. But with the right tax strategies, I managed to cut my liability by nearly 30%. Here’s how I did it — in plain English, with tools and tactics anyone in tech can use.

1. I Switched to a Business Entity

Setting up an LLC and filing as an S-Corp changed everything. Instead of paying self-employment tax on my full income, I began splitting it into salary and dividends — saving thousands in the process.

Pro Tip: If your freelance tech income exceeds $80,000/year, an S-Corp election may be worth considering.

2. I Maxed Out My Retirement Accounts

As a solopreneur, I opened a Solo 401(k) and contributed over $25,000. That was money I didn’t have to pay taxes on.

Real-World Example: I used Fidelity’s Solo 401(k) platform — no setup fee, and it integrates well with QuickBooks.

3. I Deducted Home Office Expenses

With most of my work happening from my home studio, I began deducting a portion of rent, electricity, internet, and even my ergonomic desk.

Pro Tip: Keep receipts. Use tools like Expensify or Zoho Expense for smooth tracking.

4. I Claimed My Tech Equipment

Laptops, phones, software subscriptions (like GitHub Copilot and Adobe CC), and even my chair — all business expenses.

Source: IRS Publication 535

5. I Leveraged R&D Tax Credits

This was a game-changer. I was building an AI-based mobile app, and my CPA helped me qualify for the Research & Development (R&D) Tax Credit. I received a $5,000 credit for simply building and testing software.

Real-World Example: I filed using MainStreet, a startup that automates tax credit claims for devs.

6. I Tracked Every Digital Payment

Using tools like Stripe, PayPal, and Deel meant I had to be extremely careful with 1099s. I used Bench.co for bookkeeping — they prepped clean financials and ensured I didn’t overreport.

7. I Moved to a No-State-Income-Tax State

In June 2025, I moved from California to Texas. That alone saved me roughly $8,000 annually.

Case in Point: Many developers are relocating to tax-friendly states like Florida, Nevada, and Washington.

8. I Hired a Tech-Savvy CPA

Biggest win of the year. My CPA understood how SaaS income, affiliate earnings, and crypto taxes worked. They even found errors from my 2023 returns that led to a refund!

Conclusion

Tax planning isn't just for accountants — it’s a core skill for tech professionals in 2025. If you're in the gig economy, coding for clients, or scaling a startup, the strategies I used might just save you five figures. Start tracking your expenses, look into business structures, and don’t wait until April.

FAQs

Q1: Can software developers claim GitHub and cloud hosting as tax deductions?

A: Yes, tools essential to your development work like GitHub, AWS, and even Figma can be deducted as business expenses.

Q2: Is R&D credit only for big companies?

A: No. Freelancers and startups developing new software or processes can often qualify. Speak with a CPA who specializes in tech.

Q3: Do I need an LLC to claim tech expenses?

A: Not necessarily, but having one strengthens your legal and tax position — especially if you want to file as an S-Corp later.

Q4: Are remote tech workers eligible for home office deductions?

A: Yes, if you use part of your home exclusively for work and it’s your principal place of business.

If you have any further Queries, feel free to ask on WhatsApp:

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About The Author

Manahil Chouhan is a digital creator and a skilled finance manager with years of experience. She started by filing taxes and has since discovered multiple ways to manage and save money on taxes.