Year-End Tax Tips for Freelance Writing Businesses

Like other small businesses, the end of the calendar year is an important milestone for a freelance writing business. A part of your overall business strategy should be to maximize your bookkeeping efforts during these final days of December. Making just a few small changes or adjustments can save you hundreds of dollars next April.

Here are a handful of ways to maximize your freelance business bookkeeping before the new year:

1. Bring your books current.

You need to know where your business stands. If you’ve been a good little businessperson, you’ve kept at least monthly books. If not, you’ve got some serious paperwork to do in the next few days. Also, if you use an accountant, try to get in to see him for a little while before year’s end.

2. Defer your income.

If you can receive payments during the first week of January instead of the last week in December, you can hold of paying taxes on them until next year. Of course, your deferral strategy depends greatly both on your profit or loss for the year, as well as the legal structure of your freelance writing business.

3. Make purchases, if possible.

Anything your business is going to need in the immediate future shoudl be bought now, if possible. Whether it’s a new computer or even just stationary, get it now. Consider pre-purchasing several months of your web hosting now, if you can do it. The same holds true for any bills that are due in the new year. If you can pay your cell phone for January now, do it.

4. Identify write-offs.

This depends on your accounting methods, but you may be able to write off items or equipment that have become obsolete. For most freelance writing businesses, this would include things like computers or office equipment.

5. Make contributions to your retirement plan.

If you have a Roth IRA (and you should) or a 401(k) of some sort, consider making a contribution. Realize that October is the deadline for traditional IRAs, so you’re too late if that’s the type of account you have.

Not all of these tips apply to every freelance writing business, but they should cover a large majority of folks.

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