This is a guest post by Bethany Ramos, who is a full-time freelance writer. For the best selection of folding tables visit her site.
Note: This article is US-centric as the tax norms for freelancing are different there and involves the Internal Revenue Service (IRS).
It’s that time again…Tax time, that is. If you have been working as a freelance blogger throughout the year, then you may find yourself overwhelmed at the thought of preparing your taxes by April 15.
While there are a number of advantages to working as a freelance blogger in that you get to set your own schedule, be your own boss, and potentially earn unlimited income, you do have to stay organized and stick to legal requirements when filing your taxes.
1. Group your expenses into categories
When you work as a freelance blogger, you are in essence the owner of your own business. If you are working at home, it may not seem like you have many expenses, but they can quickly add up.
These expenses may include Internet and phone bills, office supplies, computer equipment, and PayPal fees for payments from clients.
In the event that you meet a client in person, you can deduct mileage, as well as travel expenses to a business conference or educational seminar. If you’re using tax software like TurboTax, it will help you to categorize these expenses correctly so that nothing important is left out.
2. Track your income to the penny
If you are using a freelance blogging website to sell your services, like Elance or Odesk, it should be easy to compile income reports the end of the year.
However, it’s important to remember any blogging clients that you have worked small jobs for throughout the year. To make the process easier on yourself come January, keep track of all small and large jobs in one document all year long.
3. Don’t forget to deduct rent/mortgage expenses
If you use any portion of your home as a home office, the good news is that you can deduct a percentage of your rent or mortgage. This will be spelled out for you in detail when using tax software or when consulting with your accountant.
The IRS has some strict regulations about what you can declare as a home office, such as a room with a door that shuts. If you are using a legitimate home office for daily blogging, you may have the opportunity to deduct up to 30% of your mortgage and utilities.
4. Start to file quarterly
If you have prepared all of your taxes for the year and are shocked at how much you owe to the IRS, it may be time to take a deep breath and begin to pay taxes quarterly.
If you owe a large amount of taxes each year, you can cut down on this chunk of change by paying throughout the year to reflect on your prepared income tax for the following year.
So how do you plan and calculate the taxes you ought to pay ?