Like most independent contractors, many freelance writers make a significant effort to maintain a steady income and to keep expenses low. These measures ultimately help freelance writers to boost their net income over the course of a year. There are several different strategies you can start putting to use today to decrease your business-related expenses and save money now and well into the future. Consider these tips:
1) Keep Records of All Expenses
Few people really want to be a pack rat, but when it comes to taking advantage of tax deductions, keeping records of all expenses is critical. You may already keep receipts for expenses like office equipment and supplies purchases. However, you may not be aware that you may be able to write off a portion of your household expenses if you claim a home office deduction. Such expenses may include everything from the utilities on your home and your Internet service to home repairs, homeowner’s association dues and more. You can talk to an accountant for more information about a home office deduction and to learn what portion of your home expenses may be deductible. Then be sure to keep all purchase receipts, billing statements and more over the course of the year.
2) Shop for Deals Online
While you may be able to write off your business expenses like office supplies and equipment, you still don’t want to spend more on these expenses than you need to. By all means, shop around for special money-saving deals before you head out to make a business purchase. Take advantage of online coupons, special offers like “buy one, get one free” deals, and more.
3) Plan Major Purchases with Taxes in Mind
Regardless of which tax bracket you are in, taxes are likely a major expense for you. With some basic tax planning efforts on your part, you may be able to minimize your property taxes. For example, if you are considering buying an expensive piece of office equipment like a new printer or a new laptop computer, consider how such a purchase may affect your tax liability this year. If your tax liability is already rather low this year due to other business or personal deductions you have, you may consider delaying your purchase until the beginning of the following tax year.
4) Contribute to Retirement Account
Some retirement accounts allow you to make contributions on a tax-deferred basis. This not only allows you to save for the future, but it also can decrease your taxable income in a given year. Consider contributing as much as you can to a tax-deferred retirement account like a self-employed 401(k) account. Whether you can contribute $500 over the course of a year or significantly more, you can reduce your taxable income and thus your overall tax liability for the year.
Freelance writers want to reduce their expenses and keep more of their money in their pocket. These tips can help you to reduce various types of expenses including your tax liability over the course of a year. Consider implementing some or all of these tips today to save money each year.