I finished my 2013 tax return yesterday and sent it to my accountant to review – which could explain why I’m walking around today feeling about 1,000 pounds lighter.
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]