Posted by The TaxAdvocate Group, LLC

Tax Deductions Every Freelancer Needs To Know

Tax Deductions Every Freelancer Needs To Know

A freelancer is someone who works independently and provides services such as content writing, video animation, and editing, proofreading and editing, web design and app development among other services from the comfort of his house. 

This independent way of life has numerous advantages. Telecommuting and evading that day by day commute is one that presently tops most people list. There are a couple of disadvantages associated with filing your tax as a freelancer. As I would see it, one of the most significant problems is the weight-related to tax documents. As a freelancer, you have to ensure you settle your tax obligations quarterly to stay away from fees and penalties. Likewise, you're required to pay the part of Social Security and Medicare that is generally covered by a business. So is there any luck in the present course of action? Two words come to mind — tax deductions. 

Here are seven tax deductions that each freelancer should exploit as a freelancer: 

You're (Home) Office 

Most of the freelancers telecommute more often than not. The Inland Revenue Service enables you to write off the aspect of your home committed to your home office. The IRS needs you to be quite satisfied with this deduction. For instance, you can ascertain your deduction by estimating the area of your workspace and take that rate off your rent entirely as the deductible cost. 

Office Supplies 

Peradventure you work at your home office, at that point, you can deduct your office equipment and supplies and other related gadgets. The more significant part of the expensive items will presumably be filled in the first year. Seats, work areas, screens, and whatever else you have to prepare your space you can discount as a deduction. For the years to ensure you make sure to write off the less expensive items, for example, notebooks and printer paper. Every little thing counts.

Utilities 

Much the same as you can claim some portion of your lease or rent as your home office space you can do likewise for services. Part of your gas, water, and power bill are claimable. Again you need to calculate in this aspect diligently. Ensure you keep accurate records for your evaluations just in case someone tries to verify.

Travel Expenses 

Do you travel to meet customers or even go to industry meetings? Peradventure you do, these transport costs are as well claimable. Concerning entertainment and dinner, the IRS regularly gives you a chance to deduct half from them. 

Not only travel cost, but you can also likewise deduct car costs. Regardless of whether you drive your very own vehicle or use rideshare these all meet all requirements for a deduction. 

Unpaid Invoices 

Numerous freelancers depend on a constant flow of income rolling in from invoices. That said there would dependably be a couple of customers who don't pay up. Rather than assuming complete loss there, you can discount that unpaid receipt. The one fact here is that if you need to deduct unpaid invoices, you'd have to make apparent the income.

Learning Expenses 

As a freelancer, it's imperative to in every case enhance your skills through life-long learning. The IRS plainly states, "On the off chance that you are independently employed, you deduct your costs for business-related instruction specifically from your income. This decreases the measure of your earnings subject to both self-employment tax and income tax." 

Transactional Fees 

Peradventure you are the owner of an online store that receives payments online, you're likely paying processing charges on every transaction. The Inland Revenue Service gives you a chance to deduct these value-based charges too. On the off chance that you sell items on a 3rd party website like Shopify, you can likewise deduct any expenses you are liable to pay there also. 

Last Thoughts 

For the first time, freelancers recording your taxes can be a genuine agony. While it'll likely never be fun, there are specific approaches to make it increasingly tolerable. One of those strategies is to keep a more significant amount of your money by saving on tax. You can also consult a tax preparer  or accountant to guide you on in making sure you deduct the seven things above.

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