One of the perks of being a freelance writer is that we don’t have a lot of major expenses when we start up our businesses. When I started freelancing, I already had a computer and an internet connection. Just because we start out with very few expenses doesn’t mean that we can’t take deductions for our business expenses when tax season rolls around. We all know the standard deductions: the home office expense, any computer equipment bought specifically for business use and that sort of thing, but there are a lot of deductions that are easy to forget.
Any costs you incur while researching an article can be considered business expenses. If you buy a book, drive to an interview or even buy a movie ticket in order to review a film, those expenses are a necessary part of doing business. You can’t use this as a way to write off all your book purchases and other expenses, unfortunately, but as long as you can connect a receipt to a specific project, you have a good chance of being able to deduct it.
You can make use of this opportunity to deduct some travel expenses on occasion. Unless the sole purpose of a trip is to conduct research for a project — no trips to see family or vacations — you can’t write off the whole trip. But if you were to make time for an in-person interview or do some other research that produces an article or another project, you can write off some of the associated expenses. Because the situations can vary, it’s important to talk to a tax preparer to see exactly what you can write off.
Child Care Credit
If you pay for child care so that you can work on freelancing projects, you can qualify for the Child and Dependent Care Credit. There are some requirements: if you’re married, both you and your spouse must earn income. You also have to be able to document the child care. While this option is a credit, rather than a deduction, it’s still overlooked by many freelancers and can make a big difference in your tax burden.
Your Tax Preparer
While you may be able to do your taxes yourself, working with a CPA or another tax preparer can make the process a lot easier. Even better, the amount you pay to your tax preparer for completing the income tax return for your business is also a business expense and may be tax deductible. The same holds true of any other costs you incur in the course of doing business, whether you’re buying a product or paying for a service.