Save Some Money: Take a Tax Break

Posted by Lima Al-Azzeh Oct 29, 2008

Many freelance writers look forward to increasing their income by writing for the web. Yet fulltime and casual writers often forget that where there is potential to earn money, there is potential to save money. How is this done? By researching possible tax deductions and write-offs.

Earlier this year, Suite101’s David R. Wetzel wrote a great article: “Eight Small Business Tax Breaks”, outlining the benefits of having a “Small Business Tax Strategy”. Many new freelance writers don’t realize that freelancing is really their own small, privately owned business and they are fully within their rights to search for deductions in their taxes.

Additional tips for writers who are seeking legal tax deductions:

- Find a good, reputable accountant in your area. Don’t be afraid to hire an aggressive accountant who tries to maximize your deductions and lower your income taxes. Just ensure that the accountant’s efforts are fully legal.

- Keep a copy of all your receipts. Many small business owners, including freelance writers, are unaware of what kinds of receipts can qualify as a write-off. These can include records of travel expenses, related education, food (taking clients out for lunch, having dinner with an industry expert), furniture, equipment (including your computer and software), and your office space.

- Start early. Don’t wait until just before tax-time to start collecting receipts and organizing your records. Keep a file handy that you can pull out and look over at any time. And stay informed; don’t just rely on your accountant to tell you all the information you need to save your own money.

David R. Wetzel’s article is focused on tax breaks in the U.S. For information on deductions in Canada visit the Canada Revenue Agency website.