The Best Taxes for Freelance Writers Tips: Freelance Tax Know-How

March 26, 2024

This post on tax tips for freelance writers has been edited by Diana Kelly Levey in 2024. Please be aware that Mrs. Levey is not an accountant and this is not legal or professional accounting advice. Consult an accountant to help with your freelance tax questions. Always check out the IRS’ website for the latest guidelines.*

Many freelancers aren’t always excited about taxes for freelance writer topics. In the U.S., tax forms are due by April 15th and need to be filed earlier if you’re an S Corp.

If you aren’t sure how to file taxes as a freelancer, write-offs you can make, or other rules around freelance tax topics in the U.S., consult the IRS’ self-employment tax center as a guide.

As a freelancer, you’re entitled to claim tax credits and tax write-offs that will reduce the amount of freelance taxes you’ll pay to the government. Let’s be honest, in a career where there aren’t a ton of benefits, tax write-offs are some things freelancers celebrate.

You’ve likely been earning a gross income all year and might have to pay about 20 to 30 percent of that to the government at tax time. Having freelance tax write-offs can lessen the money you have to pay the IRS and your state if the expenses were necessary for your business.

While freelance and tax time tends to bring out confusion and anxiety among the self-employed set, getting your taxes completed each year doesn’t have to be painful.

This freelance tax guide is designed to help freelancers navigate tax season to receive the highest returns at year’s end. (FYI, preparing ahead of time for taxes is one of the things successful freelancers wish they knew when they first started out.)

Top Freelance Tax Tips for Freelance Writers

Here are some factors you need to keep in mind if you’re in need of freelance writer taxes advice:

• You’ll have to pay taxes as an independent worker or gig worker if you earn more than $400 from a single client each year. Freelance tax tip: Keep track all year round. I used a Google spreadsheet. It’s one of my favorite apps for writers.

• Each 1099 freelance worker should receive a 1099-MISC form around tax time for each client who pays you $600 or more that year. If a client doesn’t send you the form, you still need to claim your earnings to the government and pay taxes on those.

• Think you’ll owe more than $1,000 in taxes? Wondering how do freelancers pay taxes? You’ll likely need to start paying quarterly taxes. That’s because the government doesn’t want to wait until next spring during tax time to get the money you’ll need to eventually pay them. The 1040-ES IRS form can help you estimate that amount. I suggest consulting a tax professional if it’s your first year freelancing to see if you should pay quarterly taxes yet or if you can wait. You don’t want to mess up freelance taxation submissions.

• Self-employment tax is 15.3%. Yes, that means you have to give the government money because you decided to work for yourself. It goes toward Social Security and Medicare, in addition to your standard income taxes. (That’s why you need to ensure you’re getting a higher freelance rate!) How to calculate income tax for self-employed individuals? Check out Schedule SE (Form 1040) on the IRS site.

• Think about your business’s legal structure. It affects your assets and determines how much you owe in taxes. Work with a tax professional to see which is best for you and your business:  LLC, S corporation, C corporation, or sole proprietorship. My business, DKL Content Services Inc., is an S Corp that was established in 2018. Some businesses — like S Corps — have to submit taxes earlier than the April 15th deadline. Mine are due March 15th.

• One of my favorite tax tips for freelance writers? Invest in your future! Contribute to a tax-advantaged retirement savings plan that helps freelancers: Like a simplified employee pension (SEP). Your contributions are tax-deductible, and the money builds tax-deferred in the account. Another retirement option for freelancers is a solo 401(k). You can contribute up to 100% of your income, depending on how much you make, your age, and the maximum limitations of that year

8 Freelance Tax Write-Offs to Be Aware Of

Many of us want to reduce the liability that we’re obligated to pay taxes on. As a freelancer, one way to do that is to make sure you are recording the tax deductions that it takes to run your business. Remember, in order for these to be write-offs, they need to be “ordinary and necessary” to operate your freelance business.

(So does your afternoon candy stash count?)

Here, a freelancer’s guide to taxes and tax write-offs.

1. Home Office Expenses

Freelancers who spend a lot of time working from home can claim their home office as a write-off, but you must use that space often and exclusively for your business–so it can’t be your bedroom or your kids’ playroom. Follow this tax tip for freelance writers for details.

To calculate your home office, use the following two methods:

• Simplified: Take the square footage of your home office (up to 300 square feet) and multiply it by 5 dollars per square foot.
• Regular: Find the square footage of your home and subtract the square footage of your home office. Take that number, then multiply it by your home’s overall expenses, like property taxes, maintenance, repairs, utilities, and insurance.

2. Business Meals and Travel Write-Offs for Freelancers

One of the favorite write-offs freelancers and independent contractors enjoy is to subtract 50 percent of the cost of some of your own meals as long as they’re considered ‘necessary and ordinary’ or if one of your employees is present during the dinner. Meals cannot be extravagant or lavish, so leave that expensive champagne off the bill.

Not meeting up with clients in person yet? If you bought a client or fellow freelancer a meal to have during a Zoom meeting and you ordered food as well, a portion of your meal could be a write-off. If I meet up with a local editor at a coffee shop and have a drink and a snack, I’m tracking that in my expense sheet as a future tax write-off for freelance writers.

Since the IRS determines what is and isn’t deductible, it’s a good idea to keep your receipts handy in case of an audit. To limit paper and keep track easily, upload photos of your receipts to the Cloud so they’re at arm’s length should you need them.

You can also deduct travel expenses and you can write-off meals (up to 50 percent of the bill) as well as transportation costs. Meeting up with a client in another part of town and need to buy a train ticket? That’s a business expense. (Here’s how one freelancer earns a living as a travel writer.)

3. Freelance Membership Dues

It’s common for freelancers to have a network of peers and potential clients obtained from chambers of commerce or business associations. If you’ve joined an organization that requires you to pay annual dues, you could write them off as long as that organization pertains to your freelance business.

For example, a freelance graphic artist could write off dues associated with a local trade association for advertising professionals, but they can’t write off a country club membership even if they met clients at that location. Tax tips for freelance writers could be that a freelance membership to the American Society of Journalists and Authors is a write-off for their business.

While it’s great to have these write-offs to reduce the amount of taxes you have to pay the government, make sure the expenses are worthwhile and help you net a profit in your business and make connections.

4. Phone and Internet Expenses

You likely use your phone a lot for both business and personal use. Freelancers can deduct some of their annual internet and phone bill based on the percentage used in their business. It can be a challenge to determine exactly how much of your internet and cellphone you’ve used for work, so only deduct what is considered reasonable. (Try these tips to save even more money as a freelancer.)

Keep an itemized list of your cell phone usage (yes, checking and responding to work emails counts) and figure out a reasonable percentage you can claim. Never deduct 100 percent of your cell phone bill unless you have a dedicated number associated with your business, or you’ll likely get audited. (Can you really prove that texting your mom on your cell phone was about a work matter every time?)

5. Marketing and Advertising

Freelancers may require advertising and marketing to promote their businesses. Whether you’re ordering business cards, maintaining a freelance writer portfolio on a website, subscribing to LinkedIn Premium to find editors and marketing professionals, sending out freelance newsletters like I do, or maintaining your websites, you can deduct these costs–they’re one of the more popular tax tips for freelance writers! –as long as they promote what you’re selling or serve a purpose in your business.

6. Depreciation of Business Equipment

You probably didn’t think you could profit off of your dying business equipment, but in some circumstances, you can receive some money back on your laptops or software. Depreciation is complicated and may require you to ask a professional accountant about what can be considered a write-off, but here are some key points you’ll need to get started in this tax tips for freelancers guide:

• IRS section 179 lets you deduct the full purchase price of a qualifying asset like software or equipment that’s losing its value. Deducting this cost will reduce the amount of taxes owed at the end of the year.
• Equipment bought during the tax year will usually qualify as long as you don’t spend over $3,500,000 on said asset. Need a new office chair? It’s a tax write-off for freelance writers. Have to upgrade your laptop or purchase microphones and sound equipment to run your podcast business? These are business write-offs for freelancers.
• The asset you’re writing off has to be used to qualify. If you buy a piece of equipment in one year but don’t use it until the next year, you won’t be able to write it off. If it’s near the end of the year—early December—and you didn’t purchase any office or business equipment for your freelance writing business, you might want to buy it and start using it for work that year to help with tax deductions.
• Your assets have to be purchased by you, tangible, and used for running your business. This is another reason why you should have a business checking account and credit card.

For a full list on which business equipment qualifies, go to section 179.org.

(Related: How You’ll Save and Spend Money by Working from Home)

7. Freelance Business Insurance

Not all freelancers require business insurance, but many of us will purchase extra coverage to ensure they don’t receive any unexpected business expenses. Professional liability coverage, income protection insurance, business interruption insurance, and commercial property insurance are all covered, but some states let you write off other forms of insurance. Your freelance client might require you have business insurance as well. Make sure that the work you are doing for them is worth the insurance costs.

Sometimes you save more money by not having extra insurance, but that only applies to freelancers that don’t have clients walking in and out of their homes. If you purely operate online as a single entity, business insurance may not be the right option for you. (Check out Diana Kelly Levey’s e-book, 100+ Tips for Beginner Freelance Writers, for more must-have freelance business advice.)

8. Health Insurance

Unless you have a spouse who receives health insurance through their full-time job, you can deduct a portion of your pay premiums. Freelancers don’t have the option of receiving medical insurance through their employers because we are our own employers. Thankfully, the IRS will let you deduct dental, health, and vision insurance.

Remember that if you qualify for health insurance deductibles, you can’t claim them on the same form as your other business expenses. Write in your deductible on Line 16 of Schedule 1 that’s attached to your 1040 form.

I also write-off business expenses and services like my freelance tax accountant who helps me navigate this time of year. If you use TurboTax Freelancer to fill out your freelance taxes and submit your paperwork, you can write that program off next year.

Now that you have your taxes covered, sign up for one-on-one freelance coaching to get your freelance writing in tip-top shape for the remainder of the year.

Tags: freelance rates, freelance tips, freelance writer, freelance writing, freelance writing tips, how to make more money, making six figures freelancing, money, six figure income, six-figure freelancer

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