Essential Tax Tips for Freelance Writers

Tax Act

The career of a freelance writer can be very rewarding. However, the career can quickly lose its appeal when tax time arrives and you owe several thousand dollars. Thankfully, there are things you can do to reduce your tax bill and prevent owing such a large sum at once. The following are just five essential tax tips for freelance writers.

Pay Your Estimated Taxes

This cannot be stressed enough. Freelance writers need to pay estimated taxes in April, June, September and January of the following year. These payments will ensure that you don’t get penalized for paying your taxes late and will help ensure you don’t have a large tax bill come April. There are a number of easy to use resources online that will help you determine the amount of your estimated taxes.

Setup a Home Office

If you’re working from home, you should be able to deduct part of your rent/mortgage and utilities. However, when setting up a home office, it needs to be an area that you use solely for the purpose of your business. This does not have to be an entire room. It may even be a small corner of your home. The biggest thing to remember is to save this area for work.

Understand Your Deduction Rights

As a freelance writer, you can deduct many different things. It may be books you purchased to help teach you how to write a novel or even office supplies. Take the time to find out what you can deduct and how much of a deduction you can take. For example, you may be able to deduct part of your internet costs as long as you have proof of the percentage of time that the internet was used for work purposes.

Keep Each and Every Receipt

It doesn’t do you any good to purchase books, pens and other office items if you don’t keep the receipts. Without these receipts, if you get audited, you will be in big trouble. You need to be able to account for each and every item you count as a business expense. You should also start a filing system that keeps the receipts in order based on the type of expense.

Take Advantage of Deductions

Being self-employed means that you can deduct items that most people might not be able to deduct. For example, you can deduct the cost of health insurance. You can also setup an IRA and deduct up to $5,000 a year. Do your homework and see which items can get you the biggest deductions.

It can be hard to pay your taxes when you’re self-employed, but the good news is you may not have to pay as much as you originally thought. Follow these tips and you’ll have an easier time staying on top of the taxes and getting the biggest return.

About the Author: Wendi Ginter is an accountant who offers tax support to a wide variety of freelancers and small business owners. Make sure you talk to your accountant about any and all deductions you wish to make to ensure you’re listing them legally and properly.

Handy Tips to Using an Online Calculator

Tax Act

The introduction of the internet has ushered in a multitude of online calculators freely available for anyone who needs them. From basic calculators to the most complex calculus equations, to mortgage and auto loan calculators, name it and you will find it online. With just a few clicks here and there, you can easily arrive at the number you are looking for.

Calculators have become an important tool evidenced by the fact that most of our households and offices today are filled with them, we have them on our mobile phones. PDA’s and watches. With the wide array of calculators to choose from, one is fast gaining popularity as an important tool for future homeowners, that of the mortgage calculator with taxes. This simple online tool can help you deduce your mortgage payments based upon your total loanable amount compounded with interest rates and loan terms while factoring in the taxes involved.

Another variety of mortgage calculator does its work based on your total mortgage amount per thousand, which can easily be summed up through a payment per thousand calculator. This calculator quantifies your mortgage payments and allows you to see what it will cost you to buy a larger or smaller home.

To make your online mortgage computation much easier, we are putting together a step by step guide that can make every newbie a calculator expert in no time.

Step 1

Input the total amount of loan you wish to apply for. If you are looking towards making a down payment, then you will also add that in on the specified area. The online calculator will automatically reduce your total loan amount based on your down payment.

Step 2

Input your expected interest rate. You can search online to look for the average interest rates available in the market or inquire from your local bank to come up with a realistic number.

Step 3

Factor in your desired loan term, you can choose from the available options though most borrowers opt for a 30 year fixed term.

Step 4

Include your local cost of taxes and insurance needed for your mortgage loan.

Step 5

Press enter and let your online calculator handle the rest.

Through these simple steps, you will be able to get an accurate estimate of how much your mortgage payments will amount to and will help you assess whether your are financially prepared to take on this huge investment.

Tax Filing and Income Tips are Pertinent to Everyone

Tax Act

The Internal Revenue Service (IRS) Form 990 is the return for those organizations which are exempt from income tax. It still must be filed. This includes tax year 2009 and tax year 2010, and others of course.

Even though such organizations are not paying taxes, income remains important.

The Internet is a great resource for making extra money for many types of businesses and of course, nonprofits are no exception. There are several ways for nonprofits to make money online including soliciting donations, selling merchandise, and attracting sponsors or visitors.

Using the Internet to solicit donations can be extremely cost effective. A website can provide a user with all the information about an organization including the mission, accomplishments and what any donations would be used for. By being well informed, many people are much more willing to donate money to a good cause or organization. The website can include information how donations by cash or check can be mailed to the nonprofit. To make donations even faster and easier, a checkout can be set up to make donations by credit card or other electronic means, such as PayPal.

Selling merchandise online can also be a windfall for nonprofits. Many people would like a way to show that they support an organization with everything fro a XXL shirt to a coffee mug or other item, but are unable to travel to the nonprofit’s actual location. By offering these things for sale online, people across the country and the world can support the organization through purchases made online.

Finally, because a main issue for many nonprofits is attracting larger sponsors or visitors to their museums or other locations, a website can provide a great way to attract these people. Providing information about a nonprofit online will make sure it gets included in search engines like Bing or Google. Also, it can answer questions about the nonprofit that people will want to know before visiting or committing any money. Online your organization can publicize that you are having a benefit selling cheap prom dresses, for instance.

Remember to use the Internet to its best advantage by providing extensive and detailed information about your nonprofit on its website. This will attract money in ways you never thought possible before, and making money online will be wonderful.