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

I’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]

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