Being a freelance writer is really fun! I get to take jobs from a wide variety of companies all over the world. I get to set my own schedule (or rather, my daughters get to set my schedule) and I get to learn a lot about tons of different topics.
Take today, for example. I did some proofreading for a marketing company that specializes in window replacement blogs. I wrote articles on car repair shops. And I did some product descriptions for a company in England. And that was just in the two hours I have available each day. It's a blast!
What's the downside to freelance writing, or any job, for that matter? Taxes! :) Taxes are so out of my realm of understanding it's not even funny. But I know they're a necessity to living in this great country. And I've learned how to deal with them! Here are a few tips if you're a freelance writer or have a home business of any kind.
Tip#1: Track Expenses
I struggled with this the first few years I wrote on a freelance basis and, in fact, didn't track them at all. I'm not the type who keeps receipts and keeps track of them very well (or at all, really!) If I could have passed them off to my mom, they'd all be filed in alphabetical order and color coded. :) Once my business really took off, I recognized that I needed to track expenses better. I put an app on my phone so any time I bought printer ink, went to the post office to mail books, or ordered materials online, I could quickly put that expense on the app. At the end of the year, I create a report through that app, email it to myself, print it, and viola, there are my expenses for the year. There are a lot of resources out there that can help you do it so you don't have to write things down and track receipts all the time. This one from The Quickbooks business expense page might be a good idea to try too.
Tip#2: Track Income
As a freelance writer, income is odd. I get W2 forms from some companies and from others, I don't. So absolutely any time anyone pays me anything, I write it down. I have a little notebook above my computer and when I get an email with a payment from a client, I don't move the email until I write it down. Once I have the payment written down, I can delete or move the email. At the end of each month, I write up a summary that collects what I get paid from each company. I get a grand total from each company and a grand total for the month. At the end of the year, I do a report that states how much each company paid me. Like I said, some send me W2s and some don't, but this way, I have them all and can report that income. I only have a rare few that take taxes from what they pay me. Most of what I get is all NOT taxed, which means I have to report it.
Tip#3: Deduct the House
Just like expenses can be deducted, so too can a portion of my home expenses. My freelance writing business is run out of my house so that means a portion of the home can be deducted as a further expense. Set up an office and measure it. If the office is 1/10 of the house, you can include 1/10 of the electricity and other such bills.
Tip#4: Find Help
If, like me, you're ignorant when it comes to taxes overall, just gather the information I listed above along with anything that comes in the mail that says "important tax document" and take it to someone who is better informed than you are. My family has a tax guy because we want to make sure it's done right. Plus, we don't have the time or the brain power to spend on such ventures. As much as we dislike having to pay for such a service, it's worth it to get the project off our hands.
And that's how I deal with freelance writing and taxes for my home business. I'd go into greater detail, but clients are awaiting and it's time to get back to work for them! :)
Take today, for example. I did some proofreading for a marketing company that specializes in window replacement blogs. I wrote articles on car repair shops. And I did some product descriptions for a company in England. And that was just in the two hours I have available each day. It's a blast!
What's the downside to freelance writing, or any job, for that matter? Taxes! :) Taxes are so out of my realm of understanding it's not even funny. But I know they're a necessity to living in this great country. And I've learned how to deal with them! Here are a few tips if you're a freelance writer or have a home business of any kind.
Tip#1: Track Expenses
I struggled with this the first few years I wrote on a freelance basis and, in fact, didn't track them at all. I'm not the type who keeps receipts and keeps track of them very well (or at all, really!) If I could have passed them off to my mom, they'd all be filed in alphabetical order and color coded. :) Once my business really took off, I recognized that I needed to track expenses better. I put an app on my phone so any time I bought printer ink, went to the post office to mail books, or ordered materials online, I could quickly put that expense on the app. At the end of the year, I create a report through that app, email it to myself, print it, and viola, there are my expenses for the year. There are a lot of resources out there that can help you do it so you don't have to write things down and track receipts all the time. This one from The Quickbooks business expense page might be a good idea to try too.
Tip#2: Track Income
As a freelance writer, income is odd. I get W2 forms from some companies and from others, I don't. So absolutely any time anyone pays me anything, I write it down. I have a little notebook above my computer and when I get an email with a payment from a client, I don't move the email until I write it down. Once I have the payment written down, I can delete or move the email. At the end of each month, I write up a summary that collects what I get paid from each company. I get a grand total from each company and a grand total for the month. At the end of the year, I do a report that states how much each company paid me. Like I said, some send me W2s and some don't, but this way, I have them all and can report that income. I only have a rare few that take taxes from what they pay me. Most of what I get is all NOT taxed, which means I have to report it.
Tip#3: Deduct the House
Just like expenses can be deducted, so too can a portion of my home expenses. My freelance writing business is run out of my house so that means a portion of the home can be deducted as a further expense. Set up an office and measure it. If the office is 1/10 of the house, you can include 1/10 of the electricity and other such bills.
Tip#4: Find Help
If, like me, you're ignorant when it comes to taxes overall, just gather the information I listed above along with anything that comes in the mail that says "important tax document" and take it to someone who is better informed than you are. My family has a tax guy because we want to make sure it's done right. Plus, we don't have the time or the brain power to spend on such ventures. As much as we dislike having to pay for such a service, it's worth it to get the project off our hands.
And that's how I deal with freelance writing and taxes for my home business. I'd go into greater detail, but clients are awaiting and it's time to get back to work for them! :)
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