Along with working from home (or a home office) and getting to be your own boss, one of the other advantages of being an SEO consultant or website owner and administrator is that you are classed as self-employed or a sole proprietor, a freelancer or a contractor. Though this brings its own share of headaches when it comes to accounting and also brings its own special taxes such as Self-Employment Tax, working for yourself also brings its own fair share of things that are tax-deductible when it comes to filling out that dreaded tax return. Depending on your specific type of business there are plenty of deductibles that only you and your accountant will be able to work out, so it is worth talking with your accountant as soon as your business is up and running. In the meantime, however, this article will take a brief look at some of the most common deductibles for people who make their living working for themselves and working online.
Firstly, no matter what specific area you work in, remember the basics when it comes to tax deductibles; keep records of every single purchase, every service used, every transaction made. This applies especially to all of the software or services you purchase online and because your industry involves so many of these services it might be good practice to print off and file every single receipt for an online transaction as soon as you make it. Doing so will make your life a lot easier at the end of the tax year when it’s time to fill out those tax returns.
Secondly, just because your business is conducted online, doesn’t mean you shouldn’t claim for all the physical real-world items that go into that business. And the first place to look for those is in your office or home- office depending on where you work. If like many other self-employed online workers, you work from home then you should start by working out exactly what percentage of that home is given over to the day-to-day running of your business. Once you have a figure for this you can then deduct that same figure as a percentage of your rent or mortgage payment. As well as this you can also claim for any utilities that you might use for the operating of your business. Again, if you are working from home you can do this as a percentage of the overall cost. Consequently, you should examine utilities such as phones or electricity, gas or water, and work out how much of each you use for business.
Thirdly, remember to claim for all the physical items in your office. These will include the office furniture such as the chairs and desks, lamps and lighting, curtains, and carpets. More importantly, it includes big-ticket items such as printers and monitors, hard drives, and most important of all, your computer and monitors.
Next, it is time to think about the online side of your business. There are all kinds of deductions available for your virtual activities. Just as you claimed for your phone and electricity, so too can you claim for your broadband bills. The website that you run, (or for many webmasters the multiple websites) can be deducted from your tax return; everything from the money spent buying the domain name to the monthly hosting bills to anything you spent on add-ons or maintenance. Even support calls to expensive helplines should be claimed back. Also, once you’ve taken care of your regular bills, make a list of all the extras you have purchased for your company. These might include software or e-books, plugins or scripts, and even outsourced work on design or content, backlinks, or money spent on virtual assistants.
Finally, claim back any money you’ve spent on advertising. This would include ad-words and ads on Facebook, adverts in trade magazines, and adverts in listings such as Yellow Pages.
Follow these tips and get yourself a good accountant and you’ll quickly find that the next time you come to sort out your taxes you’ll save yourself a great deal of money.