5 Freelance Writer Tax Tips You Need To Know

As a freelance writer, you’re already busy juggling your writing assignments and securing more work. The last thing you need to worry about is getting yourself into a situation where you’re facing legal trouble.

Figuring out your taxes as a freelance writer can be tricky, but it’s not impossible.

In this post, we’ll reveal our top five tax tips to ensure you get it right.

1. Get the Skinny on Self-Employment Taxes

You may not have the CPE hours required to be a tax professional, but you should still know the basics of how the US tax system works.

For example, do you know the difference between being self-employed or being an employee? If you’re employed by a company, your employer pays up to half the taxes you owe, usually around 7.65%.

But as a self-employed independent contractor, you’re responsible for all your taxes. Experts recommend setting aside at least 30% of your total earnings for tax time.

2. Occupation or Hobby?

Are you a full-time freelance writer? Or do you have a day job and you simply do a little writing on the side?

If your writing is infrequent or just an occasional income-producing venture, you can deduct your expenses only to the extent of your income. In short, you can’t deduct more than you earn.

It’s it up to each individual (this means you) to make an honest determination of his writing. Is it truly your business, or is it just a hobby?

3. Determine Your Deductions

Ah, deductions. These are the tax tips everyone waits for.

The short answer is there’s no one-size-fits-all solution for everyone. If you have a dedicated space in your home for your writing, you may be able to claim a home office deduction.

If your writing requires you to travel for research, you may be able to claim expenses for travel, meals, and accommodation. The key is to do your research and determine what you’re eligible for–and what you aren’t.

4. Stay Organized

Where’s the receipt for this? Where did you put the form for that?

Don’t wait until April 14th to organize your records and receipts. Stay organized throughout the year by keeping detailed records of your income and expenses.

Use a program like Excel, Quicken, or Quickbooks. Have a dedicated place to store receipts, forms, and electronic files. That way, when it’s time to file, you’ll have everything you need at your fingertips.

5. Know Your Forms

When you’re employed by a company, you generally receive a W-2 tax form. These are straightforward and easy to understand.

As a freelancer, you’re entering a whole different world. You may have several (even dozens) of 1099 forms to juggle, depending on how many writing jobs you had.

You’ll have to fill out a Schedule C form to determine what taxes you owe and what deductions you can take. If you’re unfamiliar with these forms and terms, use tax software or consider hiring a professional to help.

Tax Tips and More

Armed with these helpful tax tips, you’re one step closer to filing and getting another tax season behind you.

Of course, these aren’t the only things you need to know as a freelance writer.

We invite you to browse our latest writing posts for more advice on all things writing.