As a freelancer, you are expected to pay in your own taxes, social security and Medicare. As you probably already know, self-employment taxes can be quite costly, but luckily, there are a few business-related deductions that you can take to save yourself a little bit of money. To help avoid paying too much as a freelancer, make sure that you take these deductions when you file your taxes.
1. Office Supplies
As a freelancer, you are probably always spending money on things like computers, printers, printer ink, paper, pens, paper clips and other miscellaneous supplies. Although some of these expenses might not cost that much, they can really add up throughout the course of a year. Keep all of your receipts; then, you can count all of these supplies as a business deduction.
2. Car Usage
Do you use your vehicle to go and do your own research, to meet with clients or for other business-related purposes? If so, you can count your car, gas, insurance and more as a business expense. Although you cannot count all of your vehicle-related costs, you can use any that are related to your business as a business deduction.
As a freelancer, you might have to travel to meet with clients, go to conventions and more. Luckily, you can count a lot of your travel expenses as business expenses on your taxes, such as airline tickets, fuel costs for your car, the cost of renting a vehicle and more.
4. Books and Magazines
If you have to purchase books and magazines to do your research or to stay up-to-date on trends in your industry, you should not consider these as personal expenses. Since you wouldn't be buying these publications if it weren't for your business, then they definitely count as a business-related expense for freelancers.
5. People Who You Hire
As a freelancer, you probably do most of the work yourself. However, there are probably at least a few people who you hire to help you with your business, such as a tax preparation professional or accountant, as well as people who help you with your workload. Keep track of how much you spend so that you can count these costs off on your taxes.
As a freelancer, it's important to look for as many deductions as possible. Luckily, taking these deductions can help you save on your tax bill without getting in trouble with the IRS. For more information, contact an accountant like HBE Becker Meyer Love LLP.