Nothing makes a freelancer panic like thinking about taxes. At Indy we'll be providing all kinds of resources and stories to help you with your taxes so you don't have to freak out. Or, at least, you don't have to freak out as much. But we aren't the only outlet looking out for you when it comes to taxes.
Indy contributor Stefan Palios interviewed a tax accountant for Moneywise to get tips for freelancers. His story is very helpful and includes many great tips. One area that he pays special attention to is tax deductions. This can be a complicated part of filing taxes, but the main areas emphasized that freelancers can deduct are: Licensing fees, Advertising, Training, Hardware, Home office expenses, and Travel.
The main areas freelancers can deduct are: Licensing fees, Advertising, Training, Hardware, Home office expenses, and Travel.
Rukie Liyanage, the tax accountant that Palios spoke with, cautions freelancers when they try to make deductions. Essentially, make sure that you're actually deducting expenses that are for the business and not for personal use at all.
“The key thing to remember is that if you're spending money in the pursuit of profit for your business, in most cases it would be considered a business expense,” said Rukie. “You do need to be a bit careful when the expense also involved a personal benefit portion (e.g. meals & entertainment).”
In the piece, Liyanage talks about the benefits of hiring a tax professional to help you file your taxes. Of course, he is a tax professional so he would say that. What we can say is that he has some great advice in this piece so maybe he's worth listening to.
Make sure to read Stefan's piece to learn all you can about taxes for freelancers. Indy can help you in your quest as well. We've got tools that make all of your invoicing, contracts, and proposals easier so when it comes time to do compile all your records they are in one place.