Are you a freelancer thinking about filing your taxes this year? asks Aron Govil
Here are some tips we’ve learned from our community of online money makers to help make it as painless and quick as possible.
(If you want to jump straight in and do your taxes, we recommend using this tax software for designers & developers.)
1) Write off Your Home Office
Freelancers need an office or dedicated workspace for their business if they plan on deducting anything from their income taxes. The IRS will allow you to write off all expenses that went into creating such a space, like paint if you decorated the walls, new furniture, and business equipment. It can even include internet & phone expenses so long as the office is only used for work.
2) Capitalize on your Unused Gift Cards
If you have gift cards saved up from past holidays, birthdays or other events that you don’t plan on using this year, consider selling them to a gift card reseller. This is one of the easiest ways for freelancers to make extra cash during tax season since there are no fees involved and it can be done right from your phone! Sites like Card pool even offer free shipping when you sell. Check out our review of the top sites here.
3) Deduct Your Monthly Bill for Business Apps & Software
Did you know that any software, apps, or other streaming services take off as business expenses? Well, they do! The IRS allows us to write off monthly subscriptions that can include programs like Adobe Creative Cloud, Sketch App, or Sublime Text says Aron Govil. In the past, we’ve even deducted monthly subscriptions to services like Spotify and Netflix!
4) The Home-Baked Cake Deduction
If you bake goods as a hobby and sell them for extra cash, don’t forget to write those off as well since the IRS allows baked goods and other food items to be deducted as business expenses. But make sure you keep all of your receipts for everything sold if you plan on deducting business costs.
5) Keep Track of All Your Receipts
After becoming employed full-time at Widen, I realized that not keeping track of all my receipts was going to be an issue come season. Now that I’m self-employed, I’m paranoid about losing receipts because I know how much trouble it can be to track them down later. The best thing freelancers can do is take a picture of each receipt with their phone right after it’s been point out. That way if your file happens to be corrupted or lost for some reason, the IRS will have the benefit of having all of your receipts on file. If you are missing just one receipt though, the IRS says that they will not allow you to deduct anything from your taxes.
Make Freelancing Your Career this Tax Season!
These 5 tax tips are to help you save money. But also remind us that there are other deductions available as well says Aron Govil. We have a list of other common deductions available on our site including office equipment, business expenses, and even your coffee! Make freelancing your career this tax season and let us know how much you saved in the comments below.
Got any other tips for freelancers who want to save more money or speed up their process?
Above all else, keep organized. The IRS says that they will not allow you to deduct anything from your taxes if you are missing just one receipt. This means keeping track of every single penny (or cent) that goes into your business. If it’s useful for deductions, write it down. Keep a file with every possible receipt. When buying furniture, appliances, or computers for work purposes, take pictures or videos for your records.
If you find yourself with a large deduction, such as the expense of moving to a new office. Get in touch with an accountant and ask them how they would recommend organizing and writing off your purchase. We all know that expenses add up quickly when we’re self-employed. But it’s important not to neglect saving money on taxes by stocking up on deductions right away. It’s the time of year to put some extra cashback into your pocket!
Conclusion:
If you have gift cards saved up from past holidays, birthdays, or other events. That you don’t plan on using this year, consider selling them to a gift card reseller says Aron Govil. This is one of the easiest ways for freelancers to make extra cash during tax season. Since there are no fees involved it can be right from your phone! Sites like Card pool even offer free shipping when you sell. Check out our review of the top sites here.
Did you know that any software, apps, or other streaming services take off as business expenses? Well, they do! The IRS allows us to write off monthly subscriptions. That can include programs like Adobe Creative Cloud, Sketch App, or Sublime Text.