3 Qualifying Deductions Every Freelance Writer Needs To Know About
Being a freelance writer could easily be one of the most rewarding career paths you could ever choose. You work to build your own schedule, eliminate snarky bosses, and basically are in charge of how high your income can rise. One of the biggest and few downfalls of transitioning to a freelancing career of any kind is that you take on the burdening task of making sure you give the IRS their cut of your profits. They key to keeping your bill for self-employment taxes as low is possible, is to make sure you take advantage of the fact that expenses can be used as deductions at the end of every tax year.
1. Your Computer System - Producing words and content for clients means that you will spend many hours a day on your computer. Most writers invest in a designated computer or laptop that they use for work only. Because this device is what you use to make a living, it is a tax-deductible investment, at least in part. Be sure to retain your purchase receipts anytime you invest in a new computer and keep tabs on how much you actually use your computer for work by retaining a log book.
2. Other Office Equipment - Not only is your home computer considered a possible deduction as a freelance writer, so is your other office equipment as well. If you have to invest in a new printer, hard drive, or other electronic equipment, if you can show a reason why you would need this for your business, it can be stated as a deduction.
3. Home Office Deduction - The home office deduction can be tricky, but in recent years this deduction has become more clear cut and easy to define. If you have a designated work space in your home where you usually write, you can often claim this as a deduction. You must solely use this space as your office to claim the full deduction amount, but if you have a spare room that is always used for work and only work, you may be able to claim as much as $5 per square foot for the space through the simplified home office deduction.
Even though these are only a few of the deductions you may be able to claim as a freelance writer, they may be more than enough to help you reduce your self-employment tax liability. Talk to a tax services professional (such as RJ. Garner CPA & Associates, PLC) for more information about deductions you may be able to claim as a freelance writer.