Tax Tips Every Freelance Writer Should Follow

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The tax deadline is closing in. Check out my re-post for some tips that every freelancer can use.


Whether you’re new to freelancing or a seasoned entrepreneur, tax season may have you breaking out in a cold sweat. Understanding the tax laws relating to business expenses can be a little intimidating, so here are a few tips I’ve assembled to help you determine what you may be able to claim:

Documentation

Keeping track of your income and expenses throughout the year is critical if you’re going to avoid the last-minute rush to file on time.

I’ll admit that I’m much better with words than I am with numbers, so I hire an accountant to prepare my taxes. Of course, his calculations are only as good as the information I provide, so it’s important that I keep good business records.

There are a variety of methods you can use to record your earnings and expenditures. Here are two I’ve used with great success:

Microsoft Excel—I paid for this software that was included with my Microsoft Office suite. It uses a spreadsheet format that you can customize to fit your business model. I set up two pages—one for income and one for expenses.

While many of your writing jobs may be through just a few companies that will provide a W-2 or 1099 at the end of January, I like to keep a running record of every job I do and my earnings. I generally compare my Excel income statement to the tax forms I receive, including my PayPal statement that identifies every payment transaction. This gives me peace-of-mind that I’m reporting all my earnings and haven’t missed any.

The Expenses tab is used to note everything you’ve spent throughout the year to keep your business running. I’ll break down what those items are in a minute. I categorize like items in separate columns and set formulas to total them, so my accountant can quickly find what he needs to fill out the Federal and State tax forms.

QuickBooks—This powerful software program makes documentation a breeze. Created by accounting professionals at Intuit, it intuitively and accurately tracks your business expenses all year to make sure you get every deduction you’re entitled to at tax time.

This is also a fee-based service, but they offer a free trial to help you get started. It syncs all your entries across all devices, so you’ll never miss a charge when you’re away from your office. 

You can easily record every purchase (even online transactions) manually or download them directly into QuickBooks. Even attach receipt images to the specific expense for future reference. It’s the perfect program at tax time too. All expenses are organized into categories such as Marketing and advertising, Travel and entertainment, or Office expenses and utilities; so your accountant will have everything needed to prepare your tax returns.

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Deductions

The IRS allows numerous expenses for running a business that you may never have thought of, so let me give you a list of items you need to start assembling now:

  • Software programs (especially those used to track your income and expenses like Excel or QuickBooks.)
  • Education—whether you attend seminars, take some online classes or attend a traditional classroom setting, you can take the tuition or fees as a deduction.
  • Cell phone data charges—if you use your smartphone to access the internet, communicate with clients or even write articles, you can expense a portion of your cell phone data charges.
  • Printer ink cartridges—if you’re like me, you print out your work for proofreading and red-lining before submitting to your client. Those ink cartridges are pricey but luckily, they’re also deductible.
  • Stationery supplies—the same goes for the paper, pens, planner and any other office supplies you need to perform your work.
  • Books—whether you need them to improve your craft or for reference materials, you can claim them.
  • PayPal fees—I do some business with clients who reside outside of the U.S. PayPal charges fees to exchange the foreign currency to USD, so I was able to claim those fees as a business expense.
  • Mileage and transportation—while I generally don’t travel for business, many freelancers do to meet with clients, do interviews or collaborate with a team. The mileage and transportation costs are deductible.
  • Office equipment—did you buy a laptop, desk, desk chair, lamp, cordless phone, filing cabinet, bookshelf or other assets for your business? Yep, you can deduct them too.

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Home Office

Now, this may come as a surprise, but if you have a room set aside in your home where you perform your freelance writing work (not just a corner of the kitchen table), you can claim it as a home office. To qualify, it should be a dedicated space with a desk, a chair, a filing cabinet and a computer.

Your tax accountant can give you a clearer understanding of how this works, but a percentage of these house expenses can be deducted and depreciated based on the size of your office as it relates to the overall house square footage.

These are the details I provided so my accountant could complete the proper tax forms:

  • Overall square footage of my home
  • Square footage of my office
  • Age of home
  • Purchase price
  • Annual utility costs—gas, electric and water
  • Annual homeowner’s insurance cost
  • Annual internet cost

You may be more adept at tax preparation than I, but my accountant (the amazing number man) did an itemized breakdown of all my business earnings and expenses plus depreciation for a home office to calculate my freelance writing business taxable income.

My Advice

Who knew that running your own small business could be so complicated?

I was unsure (and a little nervous) the first time I had to pull all of my business tax information together. It was amazing to actually earn money from my writing skills, but then I remembered that Uncle Sam always wants a portion of it. You’ll want to keep as much of your hard-earned money as possible. In order to do that, you’ll need to keep detailed records.

Luckily, I had some really smart people help me compile the information in my first year. They wisely suggested that I track everything from January 1st so I wouldn’t have panic attacks the following April 15th.

Obviously, if you didn’t document all of these details in 2016, things are going to be a little challenging for this tax season. Don’t let it get you down. Print out a copy of this post and start compiling the information. 

Once you’ve got 2016 closed out, get started on tracking information for 2017. Don’t forget to keep all your receipts. Why not give Excel or QuickBooks a try?

You’ll be really glad you did!

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So, was this helpful? Did I miss anything or do you have extra tips that may be helpful to other freelance writers? I’d like to hear your thoughts. Just click “Comments” below.


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Insider Tax Tips From Entrepreneurs, Freelancers, and Small Business Owners

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Tax time doesn’t have to be scary. Take a look at these tax tips from Cheap QuickBooks and other experts to make things a little easier every April.

Insider Tax Tips From Entrepreneurs, Freelancers, and Small Business Owners


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Supercharging Your Small Business

When I first started my freelance writing business, I had a thousand questions and no real idea of where to start. I worried that I wasn’t good enough or that I couldn’t dedicate enough time to my craft.

My friends at Invoice2Go have prepared a useful infographic for budding entrepreneurs looking for advice on starting a business. The comments give great insight and inspiration for those beginners and experts alike. I’ve even added some advice of my own under the “Motivation” section.

Read through and let me know if you’ve got any other thoughts that could be included in the next project.

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How Can I Build My Platform and Still Have Time to Freelance Write?

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This re-blog from Elna Cain hits pretty close to home. I’ve been struggling for months trying to find the time to keep up with day job, freelance writing AND updating my blog regularly. For any of you who follow me, you’ll know that I’m failing miserably at the blogging updates. Trust me, it isn’t for a lack of desire.

Elna has some really interesting suggestions how to help “make time” for freelance writing. I’m definitely going to try out some of her ideas. What about you?

How Can I Build My Platform and Still Have Time to Freelance Write?

This is the question I ask myself every day.

As a freelance writer and now an entrepreneur (I’m going from mom to mompreneur) I’m suddenly faced with too little time and a growing list of personal projects I want to do on top of my client work.

For me, my time is very limited, yet I’ve found hacks or productive strategies to build my platform as an entrepreneur helping moms and freelancers and still write for my clients.


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If You Want To Focus More, Never Try Harder, Science Says

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Rebecca Beris from Lifehack identifies some really interesting science about maintaining focus and willpower in this re-blog:

If You Want To Focus More, Never Try Harder, Science Says

Take a look and let me know what you think…does this make sense to you? I’m definitely going to try her suggested approach to see if I’m more successful in my everyday pursuits.

Often when we try to focus on a task or avoid temptation we try to use all our willpower. We invest all our energy into concentrating on one thing or not thinking about the temptation. However, a study has shown that when we do this we deplete our willpower. The harder we try the more we end up fatigued and out of strength…


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How to Save Time Blogging with a Virtual Assistant

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My thoughts exactly, Janice Wald from MostlyBlogging.com. Everyone needs a little help once in awhile. Why not examine the possibility of working with a virtual assistant?

The value of Virtual Assistants for bloggers is examined in Janice’s blog post linked below:

Source: How to Save Time Blogging with a Virtual Assistant


Stop struggling to “get it all done,” hire a virtual assistant blogger who understands what it takes to get the job done.

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The 5-Minute Habit That Can Change Your Life

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Re-blogged from Kerry Petsinger at Lifehack

Kerry suggests an EASY habit change that any of us can do. Take a look, give it a try and see if things get better.

The 5-Minute Habit That Can Change Your Life


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6 Presentation Tools That Will Have You Saying, “PowerPoint, Who?”

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Re-blogged from Kat Boogaard at OfficeNinjas

You’ve got to check out this informative post about all things “presentable.” I love the step-by-step instruction on how to accomplish stellar slideshow presentations without taking a 6-week course.

6 Presentation Tools That Will Have You Saying, “PowerPoint, Who?”

Presentations. Love ‘em or hate ‘em, they’re one of the necessary evils of office life. Whether it’s a small instructional meeting for just your team or a big event in front of an auditorium full of professionals, the pressure to pull together beautiful and effective presentations can be enough to make your palms clammy and your mouth dry.

Often, the will is there, but the tools and know-how might be lacking. But where there’s a will, there’s a way. Wave goodbye to 1980s clipart and whooshing PowerPoint transitions you thought were beyond cool.

We’ve rounded up a few tools that are sure to kick your presentations up a few notches.


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Top 5 Reasons to Start A Business Blog

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You may not realize it, but if your business hasn’t started a blog or isn’t keeping an existing blog updated on a regular basis, you’re missing a critical component of your consumer marketing plan.

 

Consider these blogging statistics from the experts at HubSpot:

  • Company blogs attract 67% more leads for B2B interactions.
  • Businesses who provide regular informative content through blogging are 13 times more likely to attain positive ROI.
  • 97% more website links are generated through blogging.
  • Blogs are considered the 5th most trusted source for information.

By keeping a quality blog filled with industry news, insights, and educational content, you’ll see dramatic and long-term effects on your marketing efforts with a minimal strain on your budget.

Here are the Top 5 Reasons to Start a Business Blog:

1.  Improve Search Engine Optimization – Contrary to popular belief, keywords are no longer the best way to achieve SEO. Fresh content is now the main criteria for moving up in rankings. Blog posts with regular updates will increase visibility on search engine results pages (SERPS) and drive more traffic to your website.

2.  Connect with Customers – Developing relationships with your site visitors can be accomplished in a few different ways. Engage your readers by asking questions at the end of the post, allow comments and feedback, and respond to every customer’s question in a timely manner. Did you know that blogging helps build long-term relationships too? The majority of traffic you’ll see each month will come from previous posts (some published months or even years ago.)

3.  Build Trust – Whether your business is large or small, establishing yourself as an expert in your industry can be accomplished by providing valuable, informative blog posts on a regular basis. Building trust with your readers will come naturally as they see your company as the “go-to” resource for accurate content. Just add a lead-generating call-to-action to every blog post and your conversion rate will skyrocket.

4.  Establish Solid Branding – Blogging is more personal than traditional marketing methods, so your potential customers will have a clearer understanding of your vision, mission, and high standard of excellence. Don’t be afraid to let your personality show. It will connect people to your brand and keep them coming back for more.

5.  Enhance Your Following – Every blog post provides an opportunity to increase your exposure through sharing. People are motivated to buy products and services recommended by their peers, friends, and family. When they receive a copy of your blog post through a social media account such as Twitter, Facebook, LinkedIn, Pinterest, or Instagram, it’s like getting a personal introduction to a trusted friend. This also gives you an opportunity to respond to comments, interact with your customer, and extend your social reach.

Starting and maintaining a business blog makes perfect sense. It’s a low-cost, low-effort opportunity to drive more traffic, connect with customers, build trust, establish solid branding, and enhance your following. Don’t miss out on this chance to strengthen and grow your business. What have you got to lose?


If you’re looking to start a business blog or get more investment for one you’ve already started, I can help. I’m a freelance blogger and virtual assistant, so I can get your blog established quickly. Contact me today at DebbieDeyWrites and set-up your FREE 30-minute consultation to discuss the details.

 
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