Save Money With Tax Deductions
Yes, we are just past this year’s tax deadline, but for freelancers, we must always consider Uncle Sam’s bill. Tax deductions are a very important aspect of a freelancing business.
First, it is wise if you open an interest bearing account and whenever you get paid from a client, deposit 25% of that into that account. This will be your tax bill account. There is a way you can keep from paying too much of your hard earned freelance money to the IRS. You want to use every tax deduction you possibly can.
In this post, I am going to list off tax deductions you may be able to take. You will want to keep all receipts, because if the IRS would happen to do an audit, you want to prove you deserve that tax deduction. These are possible deductions:
You can probably deduct certain expenses from having a home office. Some other deductions that can go along with this are:
- Office supplies
- Electric bill
- Internet and phone bill
Now if you rent an office, that could be deductible; if your office is in your home, you may be able to deduct a portion of your mortgage. Be sure and discuss this with your CPA.
Whenever you have to travel to complete freelance work, you have deductions. This could be in:
- Gas or fuel
- Plane, subway, train, or taxi costs
- Hotel expenses
If you are taking courses to further your education, this could be a deduction.
Insurance and Taxes
When you have a CPA prepare your taxes, his charges are probably deductible. Your business insurance is also deductible.
Did you purchase a new laptop? Maybe you bought a new software for your freelance work. Any items you purchased to help you do your freelance job are probably tax deductible.
As a freelancer you need to advertise. Costs associated with advertising your business are normally deductible.
Blog or Website
Costs associated with the hosting of your blog or website can normally be deducted also.
Medical Insurance or Costs
Any medical insurance you pay, or medical expenses may be deductible. Be sure and save receipts and ask your CPA.
Don’t let the IRS take more than they deserve. You have tax deductions you can take, so be sure and keep every receipt if it has anything to do with your freelance business.
I suggest you also read this article on Forbes. A Guide To Tax Deductions For Freelancers.