Money Doesn’t Come Without Guidance ...
A freelancer or freelance worker is a term commonly used for a person who is self-employed and is not necessarily committed to a particular employer for a long-term. Freelancing is the most common way to be self-employed and freelancers tend to work as actors, writers, artists, graphic designers, fitness instructors and the like. Although it has its perks, there is also a down side: come tax time, it’s you who has to manage the end of financial year.
When you start your freelancing, it can seem like there’s always something else to spend money on to keep things running smoothly. Fortunately, many of these expenses are tax-deductible. A tax deduction is an expense that you can subtract from your overall taxable
income, exempting that cash from taxation and subsequently decreasing the overall amount of money that’s subject to tax. You may file your tax return online, before doing that it will be better for you to know which deduction you can claim to lodge your tax return online conveniently. There are some common tax deductions for freelancers listed below:
1. Vehicle and travel expenses:
You can claim vehicle and other travel expenses directly connected with your work, but generally you can't claim for normal trips between home and work – this is considered private travel.
2. Home Office expenses:
Many freelancers work out of their homes in the early days, especially when their businesses are first getting off the ground. You may be entitled to claim deductions for home expenses including a computer, phone or other electronic devices you are required to use for work purposes.
3. Professional Development:
As a freelancer, it’s important that you find ways to stand out from your competitors in the industry. To keep ahead of the pack, many freelancers attend classes and educational seminars.
4. Advertising and Marketing:
In our increasingly connected society, self-employed persons have to engage in marketing and advertising if they hope to stay competitive.
5. Clothing, laundry and dry-cleaning expenses:
You can claim a deduction for the cost of buying and cleaning occupation-specific clothing, protective clothing and unique, distinctive uniforms.
With a majority of consumers using the internet to research purchases, creating a mobile-friendly, responsive website is crucial for a freelancer’s success. Luckily, self-employed persons can deduct costs related to their business websites.
These days, most freelancers spend their days staring at computer screens. From sophisticated video editing programs to basic software like, Microsoft Office and Adobe Acrobat which can be expensive but, makes a useful deduction for small business owners and freelancers.
8. Tools, equipment and other assets:
If you buy tools, equipment or other assets to help earn your income, you can claim a deduction for some or all of the cost. If the tools are used for both work and private purposes, you will need to allocate the amount you claim. If you have a laptop that is used for private purposes for half of the time you can only deduct 50% of the cost.
There are also some others deductions including: Banking and accounting fees, relevant insurance and liability fees, superannuation contributions, parking, gift and donation, cost of managing tax affairs, interest charged by the ATO and overtime meal etc
If you don’t know how to file tax return online or you need any particular assistance, you may contact with your agent (like taxshark.com.au) for expert advice. TaxShark are Australia's leading tax accountants offering expert advice for income tax returns, refunds and more about maximising your deduction.