Tax Advice for 2009 Freelancer Income

by Joe Wallace

Most freelance blogs preface any post about taxes by saying, “This is not tax advice. Consult a tax pro for advice on filing your taxes.” Well, I’m through with all that–at least for this post. I’m going to flat out dispense some tax advice here and boy, is it some sound advice. (Nice ego, eh?)

This advice isn’t really that radical, but it can spare you plenty of grief come April 15th–especially if you’ve made too much money in 2009 and need some last-minute help offsetting a big tax bill.

Here’s my tax advice: Gather up all your receipts this weekend or next, figure out your expenses for the year and measure them against your income. Yes–I’m suggesting you do a dry run on figuring out your 2009 taxes to see how much you owe.

Then you can figure out how much you need in additional deductions (your favorite charity, some last-minute research or business travel. And don’t forget the most important additional deduction of all–your contribution to your self-employed IRA. You’ve got quite a lot of room to contribute to that fund and you may well discover that you need to sock away an extra thousand or two in order to lower your taxable income to a saner level.

Sure, some freelancers don’t have this problem, but if you’ve had a particularly amazing year you could find your earnings and your deductions quite out of sync. Don’t be taken by surprise in April, you’ll regret not checking up on yourself. Take all your allowable deductions–they’re there for a reason.