In case you’re still working on your 2013 return, I’m sharing some tax tips for freelancers from Freelancers Union. The New York-based organization gave me permission to post highlights from a recent webinar they hosted with Jonathan Medows, a New York accountant who regularly works with freelancers and other self-employeds.
At the end of the post, look for links to other posts I’ve written on taxes for freelancers.
The following questions and answers have been edited for length and clarity:
Freelance tax filing tips
JM: No. (From MVR — Use whatever you gave to the publications or clients you worked with during 2013. If you didn’t use an EIN, you gave them your Social Security number. If you got a 1099 for a publication, the ID you used will be on it.)
Q: When will I get a 1099? If I don’t get one and I made over $600, what should I do?
JM: Self-report the income. Use Form 1040, Schedule C if you are a freelancer, or Schedule E if you are referencing a home.
Q: My income varies from quarter to quarter, therefore I’m hesitant to file quarterly taxes.
JM: You should file because if you don’t, you may face a whopping tax bill and an extra 10 percent penalty for underpaying.
Q: Can independent contractors write off coworking or renting desk expenses?
JM: Yes they can write off coworking expenses, but they need to be careful as it may impinge on taking a home office deduction.
Q: If you work from your home office, can you deduct mileage used to drive to on-site gigs?
JM: Yep, you can as you are commuting from your principal place of business to a client. You can also take the trip back.
Q: Can you claim depreciation on the equipment, such as a computer?
JM: Yes you can. You may depreciate over several years or write off via accelerated depreciation or bonus depreciation. Typically, of course, there are a lot of conditions, so look at IRS instructions.
Q: If I volunteer and receive a thank you gift (e.g. food or gift voucher), do I have to pay income tax on it?
JM: Generally not, as it is a gift to you.
Q: I’m an artist, and I volunteer my creative abilities to my community space. Can I deduct my billable rate, what I would charge someone else for that time?
JM: Great question. You can’t deduct your time but you can deduct any out of pocket expenses. Being nice is its own reward – don’t do it for the tax deduction.
Q: What should I do if I haven’t filed taxes in a few years?
JM: Get some professional help as this is a tricky situation.
More tax tips for freelancers
Want more tax advice? Here are other stories I’ve written here and for the Orange County Register
- Tax tips for freelancers, OC Register
- What you should know about home office deductions, OC Register
- Top tax tips for freelancers
- What I learned doing my freelance tax return
- Transcript: March 20 #wclw chat on tax tips for freelancers
- Taxes for freelancers: why it pays to analyze your annual income
- 8 things I learned analyzing my yearly freelance writing expenses
- Why I don’t write for free: $8,064 in 2009 business expenses
- 10 things you didn’t know about Freelancers Union
[Flickr photo courtesy Bradley Gordon]