The normal benefits that people think about are the greater rates of pay, as well as that the flexibility and freedom of picking the own career path and that the type of contracts they’d like to take on.
And on the flip side freelancers need to also think about the possibility of periods where there are tax changes in a number of areas, very little if any work is done and planning emotionally for the discipline needed to be an independent employee.
You deal with what life throws at you when you are self employed and face it head-on.
This includes taxes.
I am confident that you will gain a lot of value from this.
Primarily, one area that freelancers surely need to be disciplined is the direction of their finances.
Freelance employment requires some cautious planning in a number of areas.
One important area is the variety of tax deductions available to the freelancer employee.
1. Travel Journeys
Firstly, when travelling out and about on business, any journey costs will also be potential write offs.
By this, we mean car journeys and mileage costs.
To start with, if you work from your house you should log down anytime you are out and about on business.
Similarly, even when working from home it’s probable you’ll have to pick up or meet customer, deliver business documents, whether or go to the shop for supplies and you can claim on this too.
Second of all, when you’re types of journey for freelancers, journey for business purposes only and journey for business and pleasure.
There are two main types of journey for freelancers; business purposes only or pleasure.
Make sure that you separate them.
In either case, maintain to claim on this too you’ll also be capable to claim on this too.
2. Home Office
Describe how much of the house is for working on a business. You can then deduct a percentage to cover the time you work in your home office.
Next, any invoices that are utilized for food or meals when out and about on business will also be potential write offs.
Telephone and internet are eligible to be deducted.
Likewise, any refurbishment or expansion that’s made for the goal of a house office. But be careful about capital gains tax.
5. Office Overheads
In addition to any equipment that’s especially for the business, from telephones and stationery to printers and computers, out and about on business, any office overhead costs will also be potential write offs.
6. Insurance Premiums
Discuss with your accountant about the possibility of deductions for insurance.
This can be employers liability insurance or your own individual life insurance.
This is an area that some individuals forget about.
7. Bank Interest
You can deduct your company interest on business loans, accountant and legal fees associated with the pension plans.
If you pay subcontractors to do the work for you then there will be obligations to sub contractors and workers.
Similarly, this is a huge cost for many tax write offs for self employed.
9. Charitable Donations
Even charitable donations company and payments to non-profits can be claimed back in a particular place on your tax return.
There is any number of likely tax write offs for the freelancer that are significant to your specific area of expertise.
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