5 Tax Tips for Freelance Writers

One of my biggest concerns as a fledgling freelance writer was whether or not I’d be able to work my day job, keep up with the demands of my freelance projects, and still remain disciplined enough to keep all of my tax documentation tucked away until April 15 rolled around. In 2011 I learned that organization is a freelancer’s best friend–not just at tax time, but all year long.

Switching from W-2s to 1099s is doable–even for the busiest writers.

Tax Tips for Freelance Writers

taxes for freelance writersI’m not a tax professional, a CPA, or a tax attorney, so you’ll notice that none of these tips tell you which forms to file or what exemptions you can take. However, as an experienced freelancer, I can share some general tips that have helped me make it through tax season relatively unscathed.

  • Keep a Tax File All Year Long: On January 1, create a tax folder for filing the new year’s documents as you receive them. Your folder may include most or all of the following types of documents: Business expense receipts, estimated tax payment receipts, a copy of your W-9, 1099s, etc. (Working as a sole proprietor, you might also find it’s convenient to include W-2s from full-time employers, mortgage interest forms, and other miscellaneous forms. I throw them all in the same folder so there’s no hunting and gathering to do when I sit down to prepare my tax return.)
  • Make Estimated Payments: Nothing stings more than writing a big, fat check to the IRS in April. You can make estimated federal and state tax payments throughout the year to ensure this doesn’t happen to you. (My first year in the freelance business, I didn’t make estimated payments. I was really sorry when April rolled around!)
  • Use Bookkeeping Software: With free cloud options for tracking income and expenses and generating reports you can save a lot of time on your taxes. I’ve mentioned I use Freshbooks, but do your research to find a program that meets your needs and fits within your budget.

  • Go Paperless: If the sight of all your receipts overwhelms you, get rid of them! Any business receipts I receive electronically in my Gmail account get immediately tagged with a “business receipt” label and archived so they aren’t cluttering up my inbox, yet they are still available if I need them. I’ve also heard some great things about the space-saving NeatDesk document scanner from colleagues. It’s a desktop device for scanning and storing all your business documents.
  • Hire a Tax Professional or Use Tax Software: I feel like I have a pretty good handle on my taxes, so I do them on my own using tax software that I purchase. If you go this route, I recommend doing your taxes over the course of several days— well in advance of the deadline. Carefully go through the guided sections one at a time. If you don’t have the attention span for this or are just generally opposed to looking at numbers, hire a professional. Your sanity is worth it.

What lessons have you learned from filing taxes as a freelance writer?

[stextbox id="black" caption="About Word Carnivals"]This post is part of the February Word Carnival — a monthly group blogging event specifically for small business owners. (It’s the most fun you’ll have all month!) This month’s theme was “The Single Most Important Thing You Learned Last Year.” Check out the rest of the Word Carnival entries here. [/stextbox]


About Emily Suess

Emily Suess is a technical marketing writer by day and a freelance copywriter by night. And, no, she's not related to Dr. Seuss.
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  • Writer (remember me???)

    Emily!

    I was doing some quick research, and found (or re-found)…YOU!

    Looking forward to time to read your new blog. I’m constructing a new venture myself, and I’ll tell you about it later…including a new book, a new web site, and a new blog!

    Life is never dull here.

    Tim/Writer

    • http://blog.emilysuess.com Emily Suess

      Holy cow! Yeah, I remember. You just sorta disappeared from your old blog.

      Sounds like great stuff ahead. Keep me posted!

      • Writer (remember me???)

        Will do! I’m working on my website, and then will start the blog. And as you know by now about me–expect the unexpected! ;-)

        I didn’t really mean to disappear from my old blog; I got very busy with developing online content for courses (music and writing).

        SOOOOOO nice to see you again!

        Tim

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  • http://thewordchef.com Tea Silvestre

    Great advice, Emily — it’s certainly easy to get lazy with this stuff and then have to face the music later. I’ve seen it happen WAY too often with friends and colleagues.

    2012 is just getting started, so it should be easy enough to play catch up for folks who haven’t organized yet. Just DO it! This time next year, you’ll be SO happy you did.

    • http://blog.emilysuess.com Emily Suess

      Yep. 2012 should start off right, assuming it’s possible for people to climb out of the tax wreckage from the looming 2011 filing deadline! :) Thanks for stopping by, Tea!

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  • Clare Price

    Hate tax time. Love your advice. Especially keeping a tax file all year long. You mean a shoe box is not a filing system? Also have heard good things about neat receipt/desk. Thanks for the important reminders.

    • http://blog.emilysuess.com Emily Suess

      Well, at least people who use shoe boxes have designated a spot for their receipts! :) But, no, probably not ideal. Thanks for stopping by and commenting, Clare!

  • http://getpaidtowriteonline.com Sharon Hurley Hall

    This is definitely a good list of to-dos, Emily. It’s so tempting to put this stuff off and then panic at the end of the tax period.

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  • Michelle Church

    Love the tips as I am not that great at that stuff. I still need to get there once I am no longer staying with a friend and truly get my own office again. I will have to come back here and utilize your suggestions. Love it!

  • http://pajamaproductivity.com Annie Sisk (Pajama Productivity)

    Great post, Emily! I can only say a big fat DITTO to that estimated tax payment thing. A friend of mine got seriously slammed by that in her first year out as a freelance researcher.

    • http://blog.emilysuess.com Emily Suess

      Yep, Annie. Lump sum payments can be brutal. I don’t think any freelancer has ever let that happen twice! ;)

  • http://biz.leoraw.com/ Leora Wenger

    Emily,

    Great post. My husband is my tax guy, but this year, because I made more money than ever before, the taxes came out higher than expected. So he brought our taxes to our tax professional (whom we used once before, when I first started in business). She recommended even more deductions we can take, since I work at home. He will take that knowledge and use it for future years. Always a juggle – when to do it on your own and when to consult an expert.

    Thanks for the tips!

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  • http://www.smallbusinessfinanceforum.com/blog/ Nicole Fende

    Emily thanks for highlighting these very important tax issues and tips. Keeping on top of them during the year prevents overwhelm at year end.

    While I AM a finance whiz and numbers geek, I hate doing taxes. Every year I pay someone else to do them, and guess what? Every year I pay someone else, and every year they save me more than they cost me!

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  • http://www.creativekatrina.com Katina

    These simple reminders are great! I tend to get an instant mental block around organizing and managing the financial pieces, especially after a bout with a bad accountant a few years back. Steps are always easier, and making sure you REALLY are on the same page with your accountant, should you choose to use one.

  • http://www.IAmNickArmstrong.com Nick Armstrong

    Emily,

    Absolutely right – I’ve started to compile my tax info early. Estimated payments was a huge change last year, but well worth it.

    I also have stopped doing my own taxes – there’s a lot of stuff the free/cheap programs miss, couldn’t explain, or just didn’t have. I’ve also been tempted to hand off my accounting over the year – but I have a hard time letting go of the reigns.

    Great advice, thank you!

    -Nick

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