Tax time isn’t that far away. For those in the UK, the deadline for last year’s self-assessment is January 31, 2014. In the US, tax time is in April, as far as I believe. The two systems are completely different, along with every other country’s tax system, but one this is the same.
Freelance writers can claim some of their travel as an expense.
There are a few things to remember about this. If you haven’t in time for this year, think about it for next year! Here are some things that you need to remember when it comes to tax time as a freelance writer.
Claim Your Business Travel
Whether you drive to a meeting or you take the train to a work convention, you can claim all this back as an expense. This is all classed as business travel, and you should not be out of pocket. Gas costs, train tickets, bus expenditure and even air travel can all be claimed back as a travel expense.
However, this is only if you are travelling for purely business reasons. If there is a personal element involved, it gets a little trickier at tax time as a freelance writer.
You need to claim the percentage of the travel that was for business.
Say you went by train into the city center. You needed to go to a meeting at the bank and pick up supplies for your business, but you also decided to do a bit of shopping. You need to work out the percentage of time that was spent on business needs compared to person, and then compare that percent to your train expenses.
You Cannot Claim for the Commute
The only time you can’t claim for travel is if you do a regular commute. If you drive from your home to a regular place of business for your regular working hours, this is classed as a commute. It would be just like if you were working for someone else; you would have to do that commute without getting any money back.
Don’t bother trying to claim that. When it comes to tax time as a freelance writer there is always the chance you will be audited.
Keep All Your Receipts
Remember that note I’ve just said about being audited. There is always this chance, which means you need to prove that you travelled for your business needs. The best way to prove your travel is by keeping receipts.
This is fine when it comes to public transport and flights, but what about gas costs?
In the UK, there is a simplified version to make tax time as a freelance writer easier. You simply need to total the amount of miles you do for the sake of business and then times it by a set amount. For the first 10,000 miles, you can claim 45p per mile. After that it is 25p per mile.
Parking Charges and Congestion Charges
There are other charges involved when it comes to driving. Sometimes you need to pay for your parking, which is an allowable expense. You may also need to pay congestion charges, such as if you drive through London’s city center.
It’s also worth thinking about your insurance costs for the vehicle, along with breakdown costs or even leasing a vehicle. These are one-off expenses that the tax man will allow you to claim.
When it comes to tax time as a freelance writer, it is worth hiring an accountant. One will be able to go through all your expenses and work out whether you can claim something or not. It will save you from fines and embarrassment at a later date. However, this is just a basic overview to help you with your travel expenses.