With more freelancing opportunities available than ever before, more people are taking part in the “gig economy.” Having part time jobs enable people to make their dollar go further during the year, but if due care isn’t taken with regard to taxes, all of the hard money earned may result in a huge tax bill.
However, by taking proper deductions, you could successfully lower your tax bill. This post will highlight a few that every freelancer should know about.
Advertising and Marketing – Advertising is the lifeblood of any business, whether it is a part-time gig or a Fortune 500 company. Regardless, costs stemming from creating business cards, maintaining a website, print advertising and online commercials are all deductible expenses.
Professional development – Attending conferences is a great way to network and learn more about industry players. Ultimately this results in increasing one’s business footprint. These events are also tax deductible.
Mileage and gas – Traveling to meet clients and transporting customers (for Uber drivers) are classic expenses that are allowable deductions under the tax code. Normal wear and tear, as well as costs for maintaining a vehicle are also deductible. Keep in mind that you may use one of two accounting methods: the standard mileage option or the actual expense option.
Unpaid invoices – If you have clients that have yet to pay their bills, this prospective income can also be deducted. They actually count as business losses for the tax year, but they are very helpful in reducing taxable income.
If you have additional questions about allowable tax deductions, an experienced attorney can advise you.