Related Sponsors

Taxes

Home » Freelance Writing » Tax and Business Advice for a Freelance Writer » Taxes

Most expenses required to run your freelance writing business can be deducted on your taxes as long as your business is intended to make a profit. You must have had at least three out of five profitable years in the freelance business or the Internal Revenue Service will determine that your business is a hobby. If you find that you are losing money, or breaking even for several years, it is suggested that you consult with a tax professional.

Among the items that can be deducted are: office equipment such as computers, printers, and fax machines, publications, research, travel, phone, stationery, and any job related courses you may take during the year. Items such as computer and other office equipment is depreciated a little each year on your taxes. There are home-office deductions, however, this is a very complicated area and if you intend to take this deduction you should consult with a tax professional.

Freelancers are responsible for paying for their own health insurance and medical bills throughout the year. While this may be a financial burden during the year, this is a large tax deduction.

When filing taxes for a freelance business, you do not itemize on Schedule A as itemized deductions. Business expenses are different than other types of tax deductions and are reported on IRS Form 1040 Schedule C. If you have expenses of $5,000 or less, you can use Schedule C-EZ. Freelancers are taxed only on net income, which is income minus expenses.

Be sure to keep all receipts for business expenses. There are several computer programs that help you to track your income and expenses.

If you have questions concerning your taxes and how to prepare them, it may be to your benefit to consult a tax professional. There are also several publications that are helpful to freelancers such as Tax Guide for Small Business. The IRS also has several publications you should find helpful.

Next Page: The Ten Most Important Writing Mistakes to Avoid Overview

Related Tax and Business Advice for a Freelance Writer Articles