Although you still have until midnight tonight to file your taxes (or an extension), it is never too early to think about how to handle your taxes better next year.
As we are neither tax professionals nor claim to be so, but rather a community of freelancers and freelance placement specialists - we can only recommend the following tips to help keep our freelance talent organized for Tax Time 2013:
• Track your mileage - Especially if you drive to pick up work or deliver it to your clients, keep a record of trips back and forth. You can’t count commuting miles, but if you work offsite, mileage to and from meetings can add up to a hefty sum.
• Create a dedicated office space - You can only take a home office deduction if your space is used exclusively for work. But it doesn’t take a lot of space to count as a home office. Dedicating a small area of your home to work can help with deductions for part of your rent and utilities expenses.
• Keep your Receipts - Depending on the nature of your business, there are often a number of deductions you can make for things like Equipment, Advertising or Entertainment Expenses. Save your receipts and work with a tax professional to help you determine what can actually be written off as part of your business.
• Save some money - Depending on your situation - you may end up owing some tax next spring. You don’t want it to be a surprise. Therefore, it's always best to put a bit of each paycheck into a seperate account - just for tax payments in the following year. Worse case, if you have nothing to pay - you can always give yourself a refund!
• Make a list - If you work for a lot of different clients over the course of the year, it’s a good idea to keep a list of each client, their contact information and how much you made while working for them. There are a number of invoicing programs out there to assist with this as well. NOTE: If you go over $600 for any one client, they should send you a 1099 in January 2013. This list can help you follow up with any late documentation come Feb or March.
These are just some things that have helped my family at tax time. Do you have any great tips? We would love to hear them in the comments!
Wendy Stackhouse, Consultant for Artisan Creative