Did you know that as a freelance writer you can deduct almost anything you purchase for your freelance writing business? Depending on the freelance writing business structure you choose, you may be able to deduct a portion of your expenses, so keep this in mind the next time you file your income taxes. Make sure you keep track of all work-related expenses and have a tax professional take a look at the items to see if you can claim them on your income tax return.
Keep Personal Expenses Separate From Business Expenses
Make sure you keep a separate folder for all your freelance writing expenses from your personal expenses and run them by your tax preparer to see if they qualify as tax write-offs for freelance writers. For some, the return may not make much of a difference, but it is still worth it – a little bit of something is still better than nothing.
Take a look at some of the items that you may be able to claim on your income tax return.
Administrative Supplies: Anything you purchase from the office supply store for your writing business, such as staplers, printers, ink, paper, folders, pencils, markers, and pens are tax write-offs.
Magazine subscriptions: If you subscribe to a writing magazine that you use for research and to help with your writing career, this can be deducted as well.
Home office space: The space that you have set up as your office can be deducted also. Make sure that the office space is used for business related purposes only and nothing else. You can write off a portion of your mortgage, rent, utilities, etc.
PayPal account fees: PayPal fees can be written off as bank fees, so don’t forget to include any fees you may have from your PayPal account.
Business phone line: If you have a separate business line for your freelance writing gig, you should be able to write that off. You may also write off a portion of your fax machine, cell or home phone expenses that you use for conducting business purposes only.
Fees for paid job sites: Job sites like Elance, FreelanceSwitch, or other paid job sites can also be considered for tax deduction.
Networking events: If you’ve been to networking events to help your writing career, you should be able to write off those expenses directly related to your online freelance writing business.
Professional membership fees: If you belong to a writing group and have to pay membership fees, that can also be considered for tax deduction.
Advertising and promotion fees: Things you use to advertise or promote your business, such as business cards, brochures, newspaper, magazine advertisements, can all be deducted.
Books and educational expenses: Any books you purchase to use for research or as learning materials for your freelance writing career can be deducted.
Camera and supplies: If you take your own pictures for your articles, you can also deduct camera expenses that you use for your freelance writing business.
Shipping costs: office supplies, postage, or any items you have shipped for your freelance writing business can be deducted.
Domain name and Website costs: These expenses for setting up a business website can be considered for tax deductions.
Computer software: Any work-related computer software, such as Microsoft Word, can also be considered for income tax deduction.
Travel and entertainment expenses: Travel expenses such as mileage, trips, and hotel rooms that you use for your freelance writing career can be considered as tax write-offs as well.
Seek Expert Advice and Help From a Tax Professional
These little business expenses can quickly add up, and if you manage to keep track of them over the course of the year, they can give you some income tax relief. As long as you use everything you claim on your taxes solely for your freelance writing business and freelance writing career, you should be able to claim those expenses as tax deductions. If you only use a portion of something, check with a tax professional to see if you can claim a portion of the expenses, but do not claim the entire bill if you did not use it solely for your writing business. Claiming false tax deductions may end up costing up more than what you are trying to get back. Also keep in mind that you may be audited by the Internal Revenue Service (IRS), so you only want to claim eligible tax write-offs, and this is where an expert tax preparer comes in.
There may be more income tax deductions out there that you can claim, so check with your tax preparer to see what items can be claimed as tax write offs for freelance writers.
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IRS.gov: “Business use of home”
IRS.gov: “Business use of car”
IRS.gov: “Business travel expenses”
IRS.gov: “Business entertainment expenses”
IRS.gov: “Educational expenses”
FWJ-Freelance Writing Jobs: “20 Tax Deductions for Freelancers”
FWJ-Freelance Writing Jobs: “Now’s the Time to Track Those Tax Deductions”