The end of the year is upon us and with that comes the top of the year tax rush. One of the top ways creatives sell themselves short are in tax deductions. All the little things you've spent your money on to help build this year could possibly add up to thousands in tax deductions you don't want to miss.
I've teamed up with accounting guru Iyanna Vaughn to give share some of the top deductions you should should never miss at tax time:
1. COSTS TO START DOING BUSINESS
Did you buy a new laptop? A new camera? A new instrument? New software or hard drive this year? All of those are considered start-up costs and can be deducted from your taxes up to $5,000. Iyanna says that if you spend more than $5,000 in costs like this to launch your business the IRS lets you divide those additional costs over 180 months in a process called "amortization". So be sure to round up those receipts and count your costs!
2. MILEAGE & CONFERENCES
Driving to the studio for a session? Driving to a networking event or workshop? Driving to meet someone to talk business?Flew to NYC for Fashion Week? All of those miles could be deducted from your taxes and the IRS pays $0.54 per mile so if you haven't been counting your miles make this a major to-do for 2018. The same goes for conferences and workshops like SXSW which the IRS considers professional development. So next time you think twice about the cost of an industry conference or event remember you can get it back as a tax deduction at the end of the year
3. PayPal/Square Fees
How do you get paid? If you are using Stripe, PayPal, or Square then you are paying small fees every time someone sends you a payment and THOSE ARE DEDUCTIBLE. If you are using PayPal for Business you can download a report of fees you've paid otherwise you can just pull up your account statements and add them all up. Either way don't miss out on all your dollars.
4. Internet and Phone
Are you closing million dollar deals on your iphone like Lil Wayne? Then you should count the cost of your phone service when you do your taxes! The IRS lets you deduct in the amount of your use so here it is best that you either get a Google Voice number or a second line that you use strictly for business so you have records of your exact use should you ever be audited. The same goes for your internet especially if your main avenues of business are via social media marketing or online sales chances are you are conducting a large portion of your time running your business via the internet and can deduct this cost as well.
So there you have it. This list is by no means exhaustive but is a great starting point so I want to thank Iyanna Vaughn for her help in putting this together.
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DISCLAIMER: This post is for general information purposes only and is not a substitute for advice from a certified tax or accounting professional and should not be taken as individual advice suitable for your particular business or every business need. By providing your email address you agree to receive emails from Iyanna Vaughn and Shay M Lawson.