twocents.lifehacker.com: If you’re a freelancer, deductions are the name of the tax game: there are many business expenses you can deduct to lower your taxable income on your Schedule C (or Schedule C-EZ) if you haven’t incorporated. If this is your first time filing self-employment taxes, it’s worth the money to make an appointment with a professional.
3 comments:
I wish this article would go more in-depth in regards to tax deductions. I always see these around tax time which is always too late for the previous year. What the article fails to mention is that you need to save all of your receipts and for some, that can be difficult. You also need to make sure that personal and business expenses are tracked and that purchases are separate. Keeping up with all the do’s and don’ts can be a hassle for even the most prepared self employed person. I’ve also heard of the recommendation that you should incorporate as an LLC, but that too has its issues that are not easily flushed out. Hiring a professional costs money, something that many actors may not have. For once I would like to see a comprehensive guide for the self employed artist. It would contain what can and cannot be deducted, what amount, what types of receipts are needed and so forth. The tax code is already burdensome to read and the current administration has not made it any easier. This is of course assuming that all of your deductions total more than the standard deduction that is now, or soon will be in place. The best advice is to see out help from a tax expert, like a CPA. Find someone and make a new friend, offer them dinner for tax advice as a self employed person. Oh and make sure to save the receipt. It’s a business dinner and can be written off.
Although this article did have many interesting tax write-offs, it was not as comprehensive as I feel it should have been. At a certain point, I think everyone understands the obvious things that should be a part of "your business" as a freelancer, but what I don't think get mentioned often enough is the "how". Like now much of your mortgage can you write off? Is it per square footage? Does that also apply to utilities or wifi? Even more so, some of the soft-skill things companies do such as retreats and outings, are those tax-deductible. It becomes this sticky situation where it is hard to tell whether it's okay or crossing a line. I also wonder how to keep track of it all. I know many softwares that claim they can help you keep track of your milage or of different consumptions that are part of the daily cost of being a freelancer. I hope more articles are able to direct a new freelancer to resources to track their finances.
“If you’re a freelancer, deductions are the name of the tax game: there are many business expenses you can deduct to lower your taxable income on your Schedule C (or Schedule C-EZ) if you haven’t incorporated. If this is your first time filing self-employment taxes, it’s worth the money to make an appointment with a professional.” This is the opening of the article and I think they are definitely useful words to remember when you think about your taxes. A part of me wishes that more people were taught about this when they are in school or when they are entering the industry. Because the is such a high percentage of people that work as individual contractors, I feel that if more people were taught about their taxes when they are young a lot me people would be far better off. I also wish that the list had a bit more detail guess I’ll check out the IRS guide.
Post a Comment