The advantages of being a Freelance Graphic Designer are many; you choose your work, your hours, you make a living from something you truly love, and you are ultimately your own boss. But this freedom comes with responsibility- managing your Tax-Return being one of them. It can be stressful, and most Graphic Designers resent dealing with it, but if you follow these tips, you can learn more about your business, understand its economic reality, and feel empowered.
Firstly, make sure you are registered as self-employed, keep track of invoices, and don’t miss any deadlines. This might seem obvious, but the number of people missing deadlines and realizing too late that they haven’t registered on time is very high. This will enable you to file your tax return and write-off your expenses. And don’t forget, write-offs are a huge part of saving money.
In order to save money, you need to keep a record of what you spend on your business. This is a pretty straight forward process: keep receipts of work-related expenses and create chronological files for invoices.
What can I write-off, and how does it work?
Write-offs are about making sure that money you spend for your business is not money that you pay out directly from your pocket. Your business should pay for your expenses and needs to be filed as such in your budget. By filing these when completing your tax form, you are showing that whilst you earned X amount of dollars, once you have taken away your expenses, the real amount is lower. And this is why it is so important to know what you can claim back. Most self-employed graphic designers don’t realize the amount they can write-off.
Here are a few expenses you can write-off:
Office expenses :
- Software costs: upfront or monthly fees like Adobe, Microsoft, Photoshop or any other work-related software
- Communication bills: internet connection, landline, and cell phones. Although you should be careful as these are often used for both private and business life, and you can only deduct extra charges
- Paper, pens, sketchbooks and other office supplies
- Hardware and tools like a computer, drawing tablets, external hard drives, online backups, a camera, lenses, etc
- A part of your rent:
Advertisement and marketing:
- Website expenses: this is where you showcase your portfolio
- Social media marketing and registration fees to specialized platforms
Travels, meetings, and meals:
- Mileage and gas
- Public transport and train tickets
- Trips to conventions and work-related events
- Business meals with clients
- Meals and costs when traveling away from home
- Legal and professional fees: copyrights, filing your tax return, etc
- Short courses: anything that contributes to your professional development
- People you employ: an editor or designer
There are so many expenses that you can write-off when it comes to completing your tax return. This helps you manage budgets, set targets, build new goals, and have more control over your business. Being in control gives you the freedom to focus on what’s really important- the artistic and creative side of your Graphic Design business, and your livelihood.