2010 is officially over, and you know what that means–it’s almost time to prepare your taxes (cue groaning.) Tax preparation can be a daunting task, especially if you plan to do it yourself. And for freelancers or self-employed individuals, there may be even more confusion. Luckily, there is a lot of information available online today to help us all through the process. Terms likes 1099s, Schedule SE, Schedule C, Schedule C-EZ, will be words you soon become familiar with, if you aren’t already.
Below are 5 great tax write-off opportunities for freelancers and the self-employed. It’s important to be aware … Read more at 2009 Taxes
2010 is officially over, and you know what that means–it’s almost time to prepare your taxes (cue groaning.) Tax preparation can be a daunting task, especially if you plan to do it yourself. And for freelancers or self-employed individuals, there may be even more confusion. Luckily, there is a lot of information available online today to help us all through the process. Terms likes 1099s, Schedule SE, Schedule C, Schedule C-EZ, will be words you soon become familiar with, if you aren’t already.
Below are 5 great tax write-off opportunities for freelancers and the self-employed. It’s important to be aware of what tax write-off options are available because, as freelancers and self-employed individuals, you’re paying much more taxes than someone employed by an employer. Freelancers and the self-employed pay not only the employee share of Social Security and Medicare taxes, but also the employer’s share.
1. Job Hunting Expenses and PayPal Fees: Freelancers with long-term projects are fortunate in not having to continuously search for new gigs, however, for most freelancers, we’re always on the hunt for more projects to keep the pay-flow going. This may mean signing up with job boards where there may be a fee to join or a fee to bid on projects. These are expenses that may be written off. PayPal fees for accepting payment from clients for work completed may also be written off. Just make sure you keep receipts and print off all online documentation pertaining to the expenses and fees.
2. Health Insurance Expenses: If you are buying your own health insurance (meaning you are not part of a health plan offered by your employer or your spouse’s employer), then this is an area that is deductible. Health insurance premiums are costly so this is an area where you can see the biggest deductible from your freelance work income.
3. Home Expenses: This particularly applies to individuals who work directly out of their home. A portion of your utilities, cellphone (if used for business), insurance, and mortgage interest may be deducted. The amount deductible is based on a percentage calculated from how large your office space is within your home. You’ll need IRS Form 8829.
4. Research and Technology Expenses: If you are working in a particular industry and have expenses related to research for that industry, such as attendance cost for a conference, a book purchase, a magazine subscription, or something else related, gather your receipts as these items that qualify for tax write-off. Technology equipment, such as the cost of a computer, a printer, and other equipment you use for work also qualify. And don’t forget about Web site hosting fee and design and maintenance fees, these are also expenses you may write off.
5. Travel and Transportation Expenses: Travel associated with doing business may be written-off. Whether the expense is for airfare, hotel, car service, gas, tolls, mass transit, or car payment and insurance cost, these are all expenses you should have a tally of to determine the amount that can be written off. Business-related travel includes any transportation required to attend a business meeting, to purchase office supplies, to attend an event, and other related-business purposes. Business travel does not include going to and from work.
Want to know more? Check out these 50 blogs about taxes!
Wendy Lau is a New York City-based guest blogger for Pounding the Pavement and a writer on the subject of becoming a nail technician for the Guide to Career Education.
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