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Freelancers

Discussion in 'Journalism topics only' started by Sneed, Mar 2, 2009.

  1. zebracoy

    zebracoy Guest

    Keep track of absolutely every little thing you do, too - not just phone bills and gas receipts. Keep track of the lengths of cell phone conversations. Jot down the miles you drive, where and why. Track how much it costs to park certain places, how often you're on that wireless card and why, etc.

    By the time your taxes roll around, you should have a good approximation of how much you can deduct. Last year, nearly 40 percent of the miles I put on my car that weren't work-related were freelance-related. Plus, you can write off your car, computer, camera, etc. as well.
     
  2. Hillman

    Hillman New Member

    You certainly made a wise choice to get a second opinion. Turbotax seems very simple to me, but I've worked with taxes longer than I've written freelance pieces.
     
  3. PCLoadLetter

    PCLoadLetter Well-Known Member

    And to be fair, we're quite far from being tax experts. If you're at all well-versed in tax preparation you could be catching a lot of things with TurboTax that we missed.
     
  4. MU_was_not_so_hard

    MU_was_not_so_hard Active Member

    This may sound too simple and easy, but it's saved me more headaches and gotten me more on my return than anything else:

    Hire a really good accountant.

    I'm on my second cycle as a full-time freelancer. The guy, someone my sister suggested, gives me suggestions for write-offs, etc., that essentially take care of my taxes every year (and then some). Despite paying that 15% or so on my own, I still pulled in a solid chunk of change last April from write-offs and credits
    I pay him between $100 and $150 bucks, and in a few weeks, I get a chunk back. I also have a guarantee from his work that is nearly fool-proof. If he screws up, he'll pay the difference.

    Accountants are one of those things people fret over not thinking they can afford. For the amount of money just about anyone on this board is making, it really is one of the best investments you can make.
     
  5. Hillman

    Hillman New Member

    $150 is relatively cheap for an accountant. But if the source data is well-organized, it cuts the preparation time down considerably.

    Most solo guys bill $100 per hour. If you use a firm, the juniors probably start at $60, and the top dogs get $250 or $300.

    Every accountant I know uses some type of tax software now. Returns that formerly required four to eight hours can be turned out in two or less. I pity someone who suffers a tech breakdown during tax season.
     
  6. In Exile

    In Exile Member

    As a 15 year freelancer, I've used an accountant for 12 or 13 years. Usually costs me about $400. I do business use of home, etc., etc.

    Worth every penny. And yes, you have to pay quarterly, even when your income for the year doesn't arrive regularly. Example? In december I was told to expect a contractual regular payment I receive for some work "in a few weeks," a substantial sum that I usually use to pay my April quarterly and any other liabilities I might have (because if you estimate your taxes for the year will be $6000, and then you have a better year and your tax burden is $8000, in April you have to pay it). It's not here yet, and there is little I can do to pry it from the company. So now, not only do I not have the money available for any outstanding liability, but I also have to pay taxes on it (even though I haven't received it) because I will receive it sometime in 2009.
     
  7. Mark2010

    Mark2010 Active Member

    What range of income are you referring to here?

    I'm not at all sure my measly income from freelancing is going to vault me into that stratosphere. If so, I'd be royally screwed because I didn't keep track of mileage, cell phone calls or other expenses. Call me stupid, but I never intended for this to become a primary source of income, just a small supplement until I landed my next regular job.
     
  8. In Exile

    In Exile Member

    If you're making a profiut from free lancing - even if it is just a few thousand dollars, it is to your advantage to take advantage of every tax break you can, and if you nare just throwing up your hands and saying, "It's too complicated for me to keep track of," I guarantee you that the money you spend on an accountant will be offset by your tax savings. Otherwise you are giving away money - you have to declare the income, you you may as well declare every legal expense.

    Example, say you make $2000 a year freelancing, either by itself or in addition to a day job, in or out of the business. If you have a dedicated office, you can deduct that percentage of your housing expenses, including utilities.. use of cell phone? Deductable. Magazine and newspaper subscriptions? Deductable. Books purchased., postage, copies, that new laptop? Ditto. In fact, you may even have more deductions than income - that's okay, you are then tax free... You just have to show profit one of every four years.

    This is generally where someone jumps in and says "You'll get audited!!!" Don't lie, and just be squeaky clean.
     
  9. rpmmutant

    rpmmutant Member

    say you're freelancing and working as a substitute teacher. Will the taxes taken out of my sub checks make up for the taxes I would owe as a freelancer. I have claimed only one dependent so my sub checks get taxed to the max. But is that enough or do I need to still be making payments to the government?
     
  10. Walter_Sobchak

    Walter_Sobchak Active Member

    Glad this thread is around. I have full-time work but also have two freelance gigs that pay minimally. Combined, I probably grossed about $600-700 for the year. I have to go back and figure it out exactly.

    I shouldn't have to be paying quarterly, should I? And while this should probably go on another thread, should I be itemizing anything? I've always taken the standard deduction because I don't really have any assets.
     
  11. pseudo

    pseudo Well-Known Member

    I'm in the same boat. I made ... lessee ... $773 from the paper last year, roughly $36K from my regular job. I'm guessing I may have to pay a small amount when I file, but assuming that's nowhere near enough to necessitate quarterly payments.
     
  12. In Exile

    In Exile Member

    A those levels, you're okay. Once you start getting into the thousands, you may want to go quarterly (it is called the self-employment tax) - and once you get above $5000, you'll definitely want to , because somewhere around that point they start whacking you with penalties for not paying the tax in a timely fashion. Not a bad idea to have your day job witholding raised to keep you from having a lump sum tax bill, but this will only cover part of it.

    You can google info on all this from multiple writing sites, all of which have the same basic info.
     
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