6 Expenses You Can Add to Your Tax Preparation for Freelancers

When you are a freelancer or small business owner, you might assemble people to help you in your work and, in this way, you lead your business as an entrepreneur. You can add the following expenses to your tax preparation for Freelancers in order to get “tax perks.” 

1. Write-Off the Cost of Inventories - When you write off the cost of inventories (whether you sell goods online or offline), these items get deducted from your total revenues. Your total taxable revenues are decreased, then. So, when you write off inventory costs, you pay taxes only on your profit and not on your entire revenues. Basic enough, yet it will save you a big chunk of money! 

2. Work Trips - When you take work trips, in your own car or by many other means, you are allowed to write off the allocable cost of your business trips. To find out more, you should consider talking to an accountant for Freelancers and obtain their professional advice. 

3. Home Office - As a freelancer, in general, you start off by working from home. If you dedicate a place in your house completely to work, then you can write off the allocable cost of your house - after evaluating the square footage of your office in relation to the size of your [entire] home. 

4. Utilities you Use at Home - More ways to save on income taxes for freelance workers! When you use utilities like electricity and water - also your telephone and Internet, your Netflix (for creative inspiration) and other things too - then a part of these expenses can be written off. After all, you are using them for work purposes too! 

5. Insurance - When you are not working for an employer and are consequently not covered by anyone else’s insurance policies, if you pay insurance for your work (business liability insurance) and yourself (health insurance), then you can write them all off. 

6. Other Freelancers’ Hiring Costs - So, you started off as a freelancer and now run your business and are a successful entrepreneur, right? Well, when you hire [other] freelancers to help you in your work, according to our accountant for Freelancers, you can write off the costs of your freelancers’ help too. If you pay them more than $600, make sure to issue them a Form 1099-NEC at year-end.