Tax Tips for Freelance and WAH

The end of the year means that tax season is right around the corner. I’m not waiting this year. It is much less stressful if I already have everything I could possibly need in order, in files and ready to go. It also allows me to file early and get it over with. Here are some of the things that I am doing as a freelance writer and work at home family to make the process smoother.

    1. Get out all of my receipts for office supplies. Putting the spending into excel (or a similar program) will help me to see how much I spent and make appropriate changes for next year. It will also make it easier to total up the amounts. Ideally I would be doing this as I spend the money but I’m not quite to that level of organization just yet.

    2. Measure my office space and figure the percentage of total square footage of my home. We utilize about 112 sq ft for the office in my home and our home is 1700 sq ft. When you divide 112 by 1700 you get .0658 or 6.5%. This is what my accountant will use to help determine my deductions for the year.

    3. Sort out my household bills for the year. Include everything that you would normally pay for an office – cleaning supplies, bathroom supplies, maintenance fees (like pest control or repairs), utilities, phone service, internet service, cell phone service, garbage pick up and anything else you are using to make your business run smoothly. Keep these amounts totaled separately and don’t worry about figuring out the percentages. Anything that is used exclusively for work will not be affected by the percentage.

    4. Total up mileage. Any time that I am running errands I try to include something that is work related (meet with a client or pick up office supplies are two of my favorites). It makes my time more productive and ups my mileage deductions.

    5. Sort out membership fees and trip expenses. I make every thing about writing. Several of the jobs that I have picked up over the last several months have been about entertainment and travel. Trips that I take with my family and events that I attend are part of the job. Those expenses (or my part of them when it is the whole family) are tax deductible. So are my membership fees to writing magazines and organizations and things that I utilize to improve my profession.

    6. Continuing education is another deduction I include in my files. Courses, classes and conferences that I take during the year help me to become a better writer.

There are so many ways to save on tax day. The best thing that you can do is to get all of your records and receipts together and plan to take the time with your accountant to sort through which deductions are viable and which ones you will have to pass on. A little work now will help you be ready for a smooth experience when that tax day comes.

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  • Hi Kathryn –

    I’ve designated New Year’s Day as, “Preparing for Tax Preparation Day.” I use Quicken to keep track of expenses for my business. I also use EXCEL.

    I’m not looking forward to the process, but trying to make it as painless as possible. I always breathe a sigh of relief when everything’s filed. Which reminds me, I need to call my accountant.

    Susan 🙂