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Business Expenses and Deductions

Taxes for freelance desktop publishing businesses

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If most of us had to pay taxes* on the full amount of our income, we might have very little incentive to stay in business. However, there is relief in the form of deductible expenses including:
  • Health insurance
  • First year expense deduction
  • Rent, phones, utilities
  • Public relations, promotion and advertising
  • Internet and email services
  • Business cards and stationery
  • Bank service charges

Get explanations of these and the rest of the 25 common business deductions and expenses from Staples. Expenses common to freelance design businesses that may be deductible include all those subscriptions to design magazines such as HOW or Before & After (Professional publications), registration fees for a workshop for Adobe Photoshop, (Education or Trade Shows, Conventions, and Seminars), and all that paper we use to print proofs, more proofs, and even more proofs (Office Supplies).

Cars, Computers
Do you use your car to make trips to the printer to check on a client's job or to deliver finished projects? You may be able to deduct mileage and other automobile-related expenses. If you use the car for business more than 50% of the time, you may even be entitled to additional deductions.

Expense that new computer or depreciate it? It may depend on how much you use it for business and when you started using it. For some types of property, including computers and peripherals, bought for use in your business you may elect to deduct all or part of it as a section 179 deduction. Or you can depreciate it over several years.

Home Office Deduction
Do you work from home? You may be eligible for additional deductions if your home office use meets certain requirements such as being your principal place of business.

Some deductions are allowed whether or not you take the home office deduction and others are not allowed if you don't. For example, long distance business calls are deductible but you can't deduct a portion of your mortgage interest as a business expense if you don't qualify for the home office deduction.

The IRS (or other taxing authority) has detailed instructions on these types of deductions and how to take them. This article is simple intended to make you aware that these items may be deductible.

IRS Publication 334, Tax Guide for Small Business and Publication 535, Business Expenses are must read for US business owners. Download them in PDF format from the IRS site.

Records/Income | Expenses & Deductions | Income Tax | Quarterly Taxes | Sales Tax

Freelance Design > Starting a Business > Taxes

*This feature deals primarily with procedures and resources for US businesses. For other countries see the table on page one.

IMPORTANT DISCLAIMER: Information in this feature article or contained in the links is provided only as general guidance. Neither About nor this Guide can vouch for the accuracy of the advice offered. For specific advice and requirements for your business, please seek the advice of the IRS (or the taxing authority in your country) and/or a qualified attorney or accountant.

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