How to Make Taxes Less Taxing as a Freelancer - Dirigo Collective | Media Company

How to Make Taxes Less Taxing as a Freelancer

If only 16-year-old me could see 34-year-old me right now: living the dream as a freelance writer in Maine on the precipice of my own personal Hot Dad Summer. Writing is something I’m pretty sure I was born to do; a talent prioritized by my brain in lieu of silly nonsense like spacial awareness, word recall, confidence, a strong sense of smell, and a functioning level of serotonin. 

Freelance life is glamorous in its own right; I can work where I want, eat where I want, and take as many breaks as my day allows. Sure, it can get a little lonely sometimes and, yes, it’s remarkably easy to fall into the trap of sending emails hunched over my laptop like a cave dweller in sweatpants, but I am essentially living my own dream. Something 16-year-old me never thought about while daydreaming behind the cash register at my various retail jobs was taxes. More specifically, how to do your own taxes (and do them efficiently) while you’re working for yourself. 

It took a dash of trial and a garbage truck full of error to properly figure out how to do stuff like deductibles, capital gains, and quarterlies without giving every last dollar you’ve got to the IRS. 

For the freelancers in the crowd, here are some tips on easy and practical ways to get a hold on your taxes before they get a hold on you. 

Consider the Home Office

Before I moved to Vacationland, I was living in Brooklyn with my extremely pregnant wife and jittery dog. We had just about 750 feet to ourselves with around 150 of those feet as my own dedicated work area. It was probably the least comfortable work space on this green earth, but it was my uncomfortable work space. 

A home office is, not only, a necessity in a world where everyone’s working from home, but you can actually claim a home office tax deduction based on how much space that office takes up in your home. Since my office took up a tick over 15% of the total square footage in our apartment, I was able to write it off. Now, there is a catch: the space you write off has to be used exclusively for the work you do. That’s why I refused to work at our big, beautiful kitchen table and opted for this lovely standing desk from Fully — one of my favorite B Corp certified furniture spots. 

Track Your Deductions

I was lucky enough really early on in the game to lock down a CPA (certified public accountant) who steered me the right direction with figuring out my expenses and explaining it to me in a way that didn’t make me feel like a little boy. I write a lot of editorial content, typically focusing on travel writing. Because my livelihood is based on getting paid from companies who want me to write about far off places like, oh I dunno, Ohio that means the IRS can pay me back for all the money I spend writing these stories. 

Quick example: a few years ago, I went to Vegas for a story about watches. Most companies will reimburse you for airline tickets, but I wanted to extend the trip to get more assignments written. The money I spent from my own account on airline tickets, a car rental, a cheap chromebook, and daily meals eventually came back to me at the end of the year because those expenses were necessary for me to write the story. Just save your receipts — whether they’re paper or digital records, SAVE YOUR RECEIPTS. 

Invest in Yourself

Pardon the motivational speaker jargon, but I mean this quite literally The more you spend on perfecting your craft, the more you get out of it in the monetary sense and beyond. That $180 annual subscription to MasterClass? Deductible! All those books from Amazon on writing/marketing? Deductible! If you have a business meeting with an editor you’re working with and that meeting happens to take place in a restaurant? Say it out loud for the people in the back: deductible! 

Stay Organized

I thought I was organized until I met Dirigo Collective’s own Benn Marine. The guy is a spreadsheet magician. Regardless of my sad Excel skills, I still keep a digital log of every assignment, publication, and check I get as soon as they come in. It’s shockingly easy to let your own work pile up on you like a proverbial snowball, but it will absolutely save you a ton of work in the long run. Organization goes beyond tables and charts: get acquainted with  Forms 1040 (income tax return), Schedule C (profits and losses) and Schedule SE (self-employment tax) to familiarize yourself with the paperwork you inevitably have to fill out every single year. 

Please, Please, Please Pay Quarterly Taxes

People. Please. Quarterly taxes are paid — you guess it — every quarter, giving you the chance to pay the IRS the money you owe before it adds up. Believe me, it adds up. Because my memory is so terrible, I usually just create four events on my Google calendar for April 15, June 15, September 15, January 18 and use this form to send over my estimate of the prior quarter’s earnings. It’s not the most fun thing in the world to fork over your hard-earned money every few months to the government, but I promise you it’s way better than the alternative of one lump payment. And how, there’s harm in finding yourself a CPA to help you navigate this murky world; that’s their job!