Freelance Writing and Taxes

Image via WikipediaThis post will become another ongoing resource for information with a link in the sidebar.

As of the date of this posting, the New Year (2009) is here and it is time to carry on the act of giving to others . . . by way of taxes to the government!

Yes, as a freelance writer you are considered ‘employed’ and responsible to pay not only income taxes (in the U.S.), but other items such as Self-Employment taxes may apply as well! Now is the time to begin collecting and compiling all of your income and expense information for the prior year (2008).

To keep yourself out of trouble with the government and help you know what you need when filing there are three things I keep in mind:

1-If you can’t prove it, don’t claim it! If you are audited you will be asked to provide PROOF of everything. If you don’t have proof, spare yourself trouble and don’t claim it. Make sure to get proof for it the next time. Make it a habit to document and get itemized receipts for everything related to your work as a freelance writer. Then be sure to file it in a safe place.

2-When filing taxes yourself, read all the b-o-r-i-n-g extra information that applies to what you can and cannot claim and write off. You may miss claiming something you can or claim something you cannot if you do not use extra care. Remember, the tax code changes EVERY year. What applied last year may not apply this year, or may have changed significantly

3-If someone else prepares your taxes and makes a mistake, you are STILL LIABLE for them! Be sure you use a reputable company/tax professional and that you look over your paperwork before you sign it. If they mess up, you will be liable for the taxes, interest, and penalties. (NOTE: in some cases the IRS will waive fees, and separate penalties may be lodged by the IRS against the preparer).
See:
Paid Preparer Mistakes – Who is Liable
http://www.avvo.com/legal-answers/tax-preparer-made-mistake-in-2006-taxes-who-is-lia-13228.html
Paid Preparer Penalties
http://www.irs.gov/taxpros/article/0,,id=179707,00.html

In the United States, the deadline for filing and payment is April 15th. Between January 1 and April 15, many resources of free and low-cost help will be popping up and advertised. As I see them (the legit ones), I will add the information to this blog.

In the meantime, here are some links to get you started:

United States Department of the Treasury: Internal Revenue Service (IRS) – Homepage
http://www.irs.gov/

Recovery Rebate Credit – Important Information: You May Qualify
http://www.irs.gov/newsroom/article/0,,id=186065,00.html?portlet=6

Self-Employed Individuals Tax Center – IRS
http://www.irs.gov/businesses/small/selfemployed/index.html

IRS – Frequently Asked Questions (FAQs)
http://www.irs.gov/faqs/index.html

Highlights of Recent Tax Changes (Publications listing)
http://www.irs.gov/formspubs/article/0,,id=174600,00.html

IMPORTANT:
Please note that with the economic situation of 2008, there has been talk of giving citizens of the U.S. a tax holiday for their 2008 taxes. As the year proceeds, more information will be released and updated about that by the government, and I will continue to post updates here for you. If you become aware of any updates or relevant information not listed here, or any corrections that need to be made, please email me with them and your source(s) of information for verification. Thank you!