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OuterNotes: Tax Resources for Freelancers
http://www.writing.org/html/a_taxes.htm Ten-zero-nine-nine: they're four digits that strike fear into the hearts of all freelancers. Well, now thanks to Durant Imboden’s informative article on Taxes for Freelancers, there’s no need to dread April 15th. Mr. Imboden takes you through all of the ins and outs of Schedule C, what you can (and should) deduct, and the perils and pitfalls of profits and losses. He also takes the panic out of preparation by recommending tax software to soften the stress of filling out all of those confusing forms. --Max Kovins IRS Offers A Quick Test for the Home Office Deduction http://www.irs.gov/prod/forms_pubs/pubs/p58701.htm Do you know if you are a candidate for a home office deduction? The Internal Revenue Service's Tax Publication 587 entitled, "Qualifying for a Deduction," attempts to clear up the mystery as to whether or not expenses can be legitimately deducted from your home business, including the hard-to-take home office deduction. They offer some simple multiple-choice questions to help you with that decision (e.g., "The use of the business part of your home must be: a) exclusive, b) regular, or c) for your trade or business." Explanatory text (and examples and exceptions) are provided for each choice; you can also click on the "Comments & Help" link for further clarification. --Karin Call [Editor's OuterNote: Many accountants (including my own, who subscribes to this newsletter) actively discourage independent professionals from taking the home-office deduction. They claim that it's an automatic audit flag, but this article might justify a change in procedure -- or accountants. (I'm only kidding, Lenny!) --GT] 6. CNET: How Freelancers Can Avoid 'Heart-A-Tax' http://cnet.com/webbuilding/0-3885-8-4641049-8.html?tag=st.bl.3885-8-4641049-9.txt.3885-8-4641049-8 CNET's "Be a Freelance Web Builder" by Amy Cohen includes two valuable tax planning sections for freelancers. "Taxed to the Max" covers guidelines for meeting quarterly estimated tax requirements, which is especially valuable for new-to-freelancing types. Cohen also dispenses tips to deal effectively with an accountant to make your time and money (and their advice) really count. A related section, "Planning for the Future," discusses the SEP IRA, which provides a $24,000 annual contribution cap versus the puny $2,000 cap a Roth IRA or traditional IRA delivers. --Michael O'Brien CCH: Get Your Tax Guide for Journalists Here http://www.cch.com Lawyers Mark Luscombe and Susan Jacksack have authored a 68-page "2001 CCH Tax Guide for Journalists" that covers employment status for tax purposes, taxability of various classes of writing-related income, deductible expenses, a tax rate schedule for 2001 and planning opportunities. You'll receive the guide via snail-mail, but you'll have to jump through a few hoops on the site first. On the CCH home page, click on "Press Center," then "Special Resources for Journalists." Disregard the outdated "1999 CCH Tax Guide for Journalists" link tag -- click away, enter your contact information and you'll receive the 2001 edition. (You can also order the free "CCH Journalists Guide to Writing About Securities.") I received the tax guide within a week, found it very valuable, and have not received any unsolicited phone calls or e-mails since. --Michael O'Brien OuterNotes is produced using the OuterForce Platform, which allows publishers to easily recruit and manage remote and freelance content creation and export it into their publishing platform of choice. For more information, see http://www.outerforce.com. Copyright 2000 by OuterNotes and Trotta Media, Inc. All rights reserved. OuterNotes is a trademark of OuterForce Systems, Inc. Return to OuterNotes Home |