The Freelancer's Guide to Taxes
Nervous about filing taxes this year? If you’re a freelancer, keep to reading to find out what is – and isn’t – tax deductible so you can save money.
Freelancing has its perks. A flexible schedule means skipping the sound of an alarm clock at 8am every morning and working from the comfort of home means saving money on gas. But when April comes around, freelancers are just like everybody else – they have to do their taxes (and it’s not always a walk in the park).
Because freelancers don’t pay taxes majority of the year on side hustles and projects from Craigslist or Creative Circle, the IRS expects roughly ONE THIRD of their total income by Tax Day, according to H&R Block. Yikes! That seems like a bummer considering many full-time, in-office employees expect a hefty tax return around this time. Meanwhile, freelancers usually owe a lot of money to the IRS, which can feel like handing off money to complete strangers.
We’ve seen different emotions from freelancers. Some include the tears and panic attacks, while others appear cool as a cucumber. The key difference is turning those emotions, whether positive or negative, into something productive. Research from fellow freelancers and tax professionals alike shows what is tax deductible. Here’s a list to get you started.
In the world of tax deductions, sometimes the write-offs can get pretty…. innovative. The basics include supplies like pens, notebooks, and highlighters. But this is where creativity and innovation kicks in. Supplies don’t have to be a physical thing. If certain streaming channels, like Netflix, Hulu, or HBO Now, are needed to get the job done, those could count as write-offs. If you work from home, office space and furniture is deductible as well. Things like square footage, that fancy Himalayan salt lamp, your swivel chair, desk, etc.
Additionally, if travel is ever involved for business, you can write-off babysitting fees. Even if that child happens to be a four-legged (very good) boy by the name of Rover or Scout, freelancers can write-off payments like doggie boarding or dog walking. That’s about $500 for a week-long trip. And did you rent a car? That counts, too. Just keep the receipts.
This next one isn’t nearly as palpable, but if you’re feeling extra innovative, listen up. It’s your gym membership. For unlimited boxing or hot yoga classes, the average monthly price can cost up $90. From listening to our member’s stories and experiences with H&R Block and other tax professionals, we’ve learned writing off gym costs is doable! Here’s how -- if you can somehow prove that work is like, so stressful that yoga or the treadmill is needed for mental health purposes, write it off.
As a creative the amount and types of write-offs are endless – but don’t get carried away! The IRS has a job to do and they do it well. Stay far away from writing off expenses that don’t exist, like that private plane you bought for business trips. Only Kim Kardashian can do that. Freelancers must prove that A) personal money was involved, and B) it was business related. Sorry to say, those happy hour beer probably don’t count. Be reasonable, be honest, but don’t let the IRS take you for a ride. Education is power. Learn what write-offs work for your profession. Do the research. It’ll save a ton of money in the end.