The answer to this question could be hard and daunting to comprehend. I’ve created a list of the Tax Savings Techniques for self employed individuals and you can use it as a freelance tax write off list. See below:
1) Home Office Expenses
If you are self employed and work from your home, you can deduct a part of your household expenses.
Household expenditures which could be deducted are part is determined by calculating the percent which the size of your own workspace at home is of the size of your house.
If your home office is 15% of your home’s total sq footage, then 15% of the household expenditures could be deducted.
The household expenditures could be deducted:
Mortgage interest Property taxes repairs and
Maintenance Condo fees Utilities
2) Pay wages to members of the family
Do your family work for you and help you do business?
Self employed by paying members of the family a salary can save taxes.
If your members of the family help out and you set up payroll then this strategy works.
Those earning less than you’ll be in a lower tax bracket, thus allowing you to save tax.
The wages will be tax-deductible for your business operations.
The reason behind doing things is to make sure there’s a genuine business connection between your self and your members of the family, which will help alleviate any challenges.
3) Lease a car save taxes for the self
Self employed by leasing a car for their small business also have the opportunity to save taxes.
The car costs that may be deducted for tax purposes:
Repairs and maintenance
And registration Lease
Pro Tip: Check with a tax professional in your area because the exact amounts and limits can vary.
Anything over and above this limit would be non-deductible.
This is a rough example: The percent of the vehicle operating costs that may be deducted is calculated as: if you drove 12, 000KM for business purposes throughout the year and 20, 000KM in total, then 60% of the vehicle’s operating costs can be deducted.
More importantly, To confirm the kilometres you drove for business you must keep a daily log.
4) Keep accurate books
How will accurate books and records help their self employed conserve taxes?
The reply is that accurate books and records make sure that all costs are captured on your company financial statements and personal tax return.
This way, nothing is missed.
The very best way to keep accurate books and records is to buy an accounting software program like FreshBooks.
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