5 Tax Tips for Freelance Writers

One of my biggest concerns as a fledgling freelance writer was whether or not I’d be able to work my day job, keep up with the demands of my freelance projects, and still remain disciplined enough to keep all of my tax documentation tucked away until April 15 rolled around. In 2011 I learned that organization is a freelancer’s best friend–not just at tax time, but all year long.

Switching from W-2s to 1099s is doable–even for the busiest writers.

Tax Tips for Freelance Writers

taxes for freelance writersI’m not a tax professional, a CPA, or a tax attorney, so you’ll notice that none of these tips tell you which forms to file or what exemptions you can take. However, as an experienced freelancer, I can share some general tips that have helped me make it through tax season relatively unscathed.

  • Keep a Tax File All Year Long: On January 1, create a tax folder for filing the new year’s documents as you receive them. Your folder may include most or all of the following types of documents: Business expense receipts, estimated tax payment receipts, a copy of your W-9, 1099s, etc. (Working as a sole proprietor, you might also find it’s convenient to include W-2s from full-time employers, mortgage interest forms, and other miscellaneous forms. I throw them all in the same folder so there’s no hunting and gathering to do when I sit down to prepare my tax return.)
  • Make Estimated Payments: Nothing stings more than writing a big, fat check to the IRS in April. You can make estimated federal and state tax payments throughout the year to ensure this doesn’t happen to you. (My first year in the freelance business, I didn’t make estimated payments. I was really sorry when April rolled around!)
  • Use Bookkeeping Software: With free cloud options for tracking income and expenses and generating reports you can save a lot of time on your taxes. I’ve mentioned I use Freshbooks, but do your research to find a program that meets your needs and fits within your budget.

  • Go Paperless: If the sight of all your receipts overwhelms you, get rid of them! Any business receipts I receive electronically in my Gmail account get immediately tagged with a “business receipt” label and archived so they aren’t cluttering up my inbox, yet they are still available if I need them. I’ve also heard some great things about the space-saving NeatDesk document scanner from colleagues. It’s a desktop device for scanning and storing all your business documents.
  • Hire a Tax Professional or Use Tax Software: I feel like I have a pretty good handle on my taxes, so I do them on my own using tax software that I purchase. If you go this route, I recommend doing your taxes over the course of several days— well in advance of the deadline. Carefully go through the guided sections one at a time. If you don’t have the attention span for this or are just generally opposed to looking at numbers, hire a professional. Your sanity is worth it.

What lessons have you learned from filing taxes as a freelance writer?
[stextbox id=”black” caption=”About Word Carnivals”]This post is part of the February Word Carnival — a monthly group blogging event specifically for small business owners. (It’s the most fun you’ll have all month!) This month’s theme was “The Single Most Important Thing You Learned Last Year.” Check out the rest of the Word Carnival entries here. [/stextbox]

ABCs of Freelance Writing: U is for Upfront Payment

I’ve written about the sticky subject of collecting money from difficult clients before. In an article I wrote for Small Business Bonfire, I shared some ideas I had for getting deadbeat clients to pay up. But today I’d like to talk about one way you, as a freelance writer, can avoid dealing with deadbeats entirely.

It’s called an upfront payment.

And it’s glorious.

Tips for Collecting Upfront Payments

Create a fee schedule for your most popular services.

Online freelance writing payment

First things first, establish freelance writing fees so you’re not wasting time debating what to charge. Most of my pre-pay clients are in a hurry to get a job done, and having a rate sheet expedites the process.

Choose between full and partial upfront payments.

When it comes down to it, you have a couple of pre-pay options: you can bill for a fraction of the invoice upfront, or you can bill for the entire cost of services. I’ve done both, but I tend not to split invoices under $200.

Explain your upfront payment policy.

New clients may need to be reassured that you’re not going to leave them high and dry after you’ve got their money. Explain your entire process in writing (preferably in a contract) before any money changes hands. Confirm your commitment to the deadline and be clear about what happens if the customer is not satisfied with the work or requests revisions.

Offer immediate Payment processing.

FreshBooksI bill with Freshbooks because it enables me to send invoices and statements immediately via email. I can collect payments through my PayPal account, making it possible for me to accept a job, bill the client, receive payment, and begin work on a project in a matter of minutes. Freshbooks even has an arrangement with PayPal where you can opt to waive the standard PayPal fees and select a flat rate fee per transaction for $.50. That’s pretty sweet, because those percentage-based PayPal fees can seriously eat into your profits if you use it a lot.

Never miss a deadline.

The thing about charging for work upfront is that you have to be able to deliver consistently. If you aren’t committed to delivering the finished product when promised, you’ll have a hard time maintaining a solid business relationship with your clients.

Deliver your best work.

Think of the upfront payment scenario like a transaction at your local electronics store. As a customer, you expect to walk away with a solid product that lives up to the claims on the packaging. Your clients feel the same way about your writing. When a client pays upfront, there’s a greater expectation for you to get the job done right the first time.

#BLBC12 Judge: Sulekha Rawat

[stextbox id=”black”]With the Brave Little Blogger Contest (#BLBC12 on Twitter) less than a month away, it’s time to start introducing our volunteer judges. You can learn more about Sulekha in the next Writing Contest Newsletter. Sign Up Now.[/stextbox]

Meet Sulekha Rawat

I WRITE…My life is my Muse and my Muse is my life. I embrace friends and their pain becomes mine, their joys make me happy. I can’t detach myself from those I care about and that hurts me at times, but it’s all an integral part of who I am. I sing off-key, dance with two left feet. Life is interesting and challenging but I wouldn’t have it any other way because, “Life is for living”, is the best advice given by a dear friend.I greatly enjoy movies and music. Books are my passion.I love writing about the Sun, Moon, Sea, Love, Life, heartbreaks, food, clothes…etc. I tweak my writing with humour because a life without some laughs in it is a sad one. Hope to share my stories with you all for a long time to come.

Sulekha’s Website: http://www.socialpotpourri.com

Sulekha’s Blog: http://www.sulekharawat.com

Sulekha on Twitter: @Sulekkha

Sulekha on Facebook:  http://www.facebook.com/luckkss


For More Contest Information

  • View all posts tagged “Writing Contest”
  • Check out Contest Central
  • Advertise during #BLBC12

#BLBC12 Judge: Kiersi Burkhart

[stextbox id=”black”]With the Brave Little Blogger Contest (#BLBC12 on Twitter) less than a month away, it’s time to start introducing our volunteer judges. You can learn more about Kiersi in the next Writing Contest Newsletter. Sign Up Now.[/stextbox]

Meet Kiersi Burkhart

Kiersi Burkhart

I’m a writer of young adult and middle-grade novels, children’s books, short stories, sci-fi epics, and a lot of other things in between. I also moonlight as a blogger/book reviewer and occasionally, as an illustrator.

With all that out of the way, the real thing you should know about me is that I love to read, but I’m a harsh critic. I guess those things go hand-in-hand: I’ll read everything put in front of me, and I can usually pack away a 400-page novel in a matter of hours, but as a writer–I know good writing and bad writing when I see it, and a poorly-placed adverb can really turn me off.

On the other hand, if I love your work, I’ll love it with every bone in my body.

Kiersi’s Blog: http://prolificnovelista.com

Kiersi on Twitter: @Kiersi

Kiersi on Facebook:  http://facebook.com/kiersiburkhart


For More Contest Information

  • View all posts tagged “Writing Contest”
  • Check out Contest Central
  • Advertise during #BLBC12