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How to navigate tax season as a freelance writer

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Freelance writing allows you to work anywhere and at any time, but when you earn money from home, you must set money aside for your taxes.

How much should you save?

Money earned from freelance work is gross revenue; thus, no taxes are withheld for you. So, when you file your taxes, this income is expected to be reported, and you must pay the taxes owed. Your tax bracket will determine the exact amount of taxes owed, but a good rule of thumb is to set aside around 30% of your gross income.

Do not forget to include your expenses

Luckily, as a freelance writer, you can deduct all of your business expenses directly tied to your freelance work. If you had to purchase a new laptop or editing software subscription for your freelance work, these are all expenses you can include. Make sure to keep a record of your receipts of these expenses, in case you are ever audited.

Other factors to consider

Depending on how much money you earn from home freelance writing, you may need to register for a business number and pay GST/HST. Contacting an accountant specializing in freelance or small business taxes can help you clarify any confusion.

Bookkeeping to simplify your taxes

If you still need to start some form of bookkeeping, it may be time to change that. Diligently recording your income and expenses throughout the year will make it easier for you to report them at the end of the year.

Taxes are not something you can avoid, but they are something you can be prepared for and are an unfortunate part of being a successful freelance writer.

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