Are you working for a content marketing firm, content mill, independent businesses or a freelancer’s platform? Whether you’re writing from a separate office, a coffee shop or the spare bedroom in your home, your writing business is still just that: a business, with all the responsibilities it entails. With tax season upon us, here are a variety of ways you can deduct the expenses from your writing business.
Home Office Deduction
The most popular deductions is for a home office used exclusively and regularly for business purposes. It allows you to deduct a proportional amount of your mortgage interest, property taxes, homeowner’s insurance and utilities. The amount you deduct is based on the square footage of the home office area divided by the total square footage of your home multiplied by 100 to get a percentage. As an example, if you have a 200 square foot office in a 2,000 square foot home, you would be able to deduct 10% of those expenses (200/2,000*100=10%). If it sounds too complicated, a Safe Harbor provision that went into effect starting this tax season allows you to take a standardized deduction of $5 per square foot up to 300 square feet ($1500 cap).
Office Furniture, Supplies and Equipment
If you purchase furniture for your home office, such as a desk, chair, bookcase or filing cabinet, supplies such as printer ink, pens and a calendar or equipment like a new computer, software, external hard drive or USB stick drives, you can deduct these items as part of the cost of doing business. On high-ticket items, like computers, you can also deduct depreciation as it loses value over its course of life.
Whether it’s from PayPal fees, printing, advertising, accounting, paid access to freelance platforms or legal advice, these fees are deductible as they are not expenses you would have incurred if you didn’t have a business. Don’t forget any fees you pay for apps to keep up with social media marketing, website and hosting fees!
Did you go to an awesome writer’s conference or meet with a nearby client? Your mileage, entry cost, lodging and food can be deducted for these types of travel expenses as they help you grow your business.
No matter what costs you deduct, don’t forget to document them! You’ll need to save receipts and other documentation for seven years just in case you need to prove what you spent on expenses. An easy way to do this is to put all your tax records in a particular folder or mailer envelope and label it with the year and when it can be shredded.
Now that you’ve got some ideas on what you can deduct, if you’ve received a rebate this year, why not use those funds to create deductions for next year’s taxes while investing in your business? Sit down and write a list of what will make your business better this year!
Cathleen V is a freelance writer available on WriterAccess, a marketplace where clients and expert writers connect for assignments.