Eight tax tips for beginner freelancers

The Northwest Editors Guild meeting in January featured an engaging talk by Charlene Fleming, CPA, regarding taxes for self-employed creative freelancers. [more] Engaging. On taxes. Really. And helpful for newbies. Here's a few notes that I circled, starred, and underlined as "aha" moments for me. Your results may vary.

• Set aside 20 - 25% of income to cover federal and Washington state taxes. (Percentage applicable to a service-oriented business with no employees.)

Obtain a state business license to protect your customer from potential liability re: temporary staff rulings.

Health insurance premiums are a deductible business expense.

Internet and cell phone expenses are fully deductible as a business expense. It is understood that these are also likely used for personal activity, however you don't need to apply a percentage of business vs. personal use. You can deduct the total.

If services are provided by you when you are out of Washington state, do not pay state tax on that income. You must be physically out-of-state when delivering the service in order to exclude it from the state income tax calculation.

The federal Internal Revenue Service (IRS) is more understanding than the Washington state Department of Revenue regarding small mistakes in your return.

The IRS and Washington state Department of Revenue don't communicate with each other.

• It is money well spent to hire a professional to help with taxes.

Remember, your results may vary. Please do your own validation or hire a tax pro.

tax insights for creative freelancers - free

Tonight Monday January 14 at the Richard Hugo House in Seattle there's a free educational talk for self-employed, creative freelancers.

As part of the semi-monthly meeting of the Northwest Editors Guild, a seasoned finance guru will focus on the tax needs of the self-employed, creative set. You do not need to be a member of the Guild to attend the meeting, however be aware there's potential for passive-aggressive guilting you into membership ala the public school PTA. (I'm just saying.)

From the Editors Guild website:
"Charlene Fleming, CPA, will offer members some guidance on the ever-popular subject of taxes, with a special focus on the needs of self-employed, wordy/artsy freelancers. Charlene is a licensed CPA with 15 years' experience working with self-employed people. For the first five years, she was also the CFO at the Seattle Children's Museum, where there were 'more artistic types than you could shake a stick at.' She has a master's degree in accounting and an undergraduate degree in finance."

via Seattle Writergrrls