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June Walker Tax Consultant for the Self-Employed
http://www.JuneWalkerOnline.com
            
The Best of the Best! After years of reading all the tax books on the market, June Walker’s “Self-employed Tax Solutions” is by far the best book on taxes for the self employed. Easy to understand, full of great details, suggestions for organization, help with complicated deductions and examples galore, this is the book you need in your reference library! June’s website is full of even more tips and it has a forum where you can ask questions. June Walker is a tax and financial consultant since 1979, and is a practicing accountant. Buy her book at her website for a special LOW price!!!

Designers Dozen:  Tax Saving Tips for the Graphic Artist
(Reprinted with permission from www.JuneWalkerOnline.com)

1. Use two offices. Forget the old husband’s tale that home office or studio is an audit red flag. The IRS has lightened up on this. Even if you work out of two or three places, if used exclusively for your work they are all legitimate deductions. Yes, both your home studio and the spare room at the beach rental where you do your three-hour morning blogging routine are deductible business expenses.

2. Work at home to increase your business transportation deduction. If you freelance at someone else’s studio you can still deduct costs for the area of your home used exclusively and regularly for your business – no matter how small the area. And by having two work places you’ll increase your deduction for auto use or public transportation costs.

Here’s why: The IRS does not allow a deduction for commuting from home to work and back. But it does allow a deduction for getting from one workplace to another. If you work in your home studio and then drive to your other studio you are now driving “from one workplace to another.” You’ve increased your business miles and the amount of your auto deduction, or made your subway trip a business expense.

This also applies to something like attending the Boston Flash Forward Conference. Creative Bostonians without a home office would not get to deduct the “T “ cost from their home to the conference.

3. Careful, no office sharing allowed. Keep in mind the all-important IRS exclusive use rule: that your office must be yours and yours only. If you’re the designer for Clyde Client and your wife handles the tech side of Clyde’s website and both you and your wife use the same office – sorry, no deduction. The way around that: make one spouse the employee of the other. BTW – there are a whole lot more benefits to hiring your spouse.

4. Hire your spouse. Even if your honey only helps you out with printer jams or errand running, pay him for it. Putting him on your payroll opens up a vast array of deductions. You can provide generous employee benefits and deduct the costs of those benefits from your design income. What kind of benefits? Well, for one thing, you can give him a medical plan that covers his family – that’s you and the kids. That would make your trip to the doctor a deductible business expense.

5. The more broadly defined your business the more deductions you can take. If you sell Web page templates for MySpace, Blogger and Moveable Type via your blog, and also generate AdSense income from the blog, and also consult on how to promote through blogging, you need to think of all that as one business. Give your work an expansive general description, like consultant to the virtual universe. Claim all the income --- every dime. Consider as a possible business expense everything you do that makes you better at making money.

6. Keep it simple. By taking the broadest possible view of all your income generating ventures you can group them as a single enterprise and thereby can really simplify your recordkeeping. But don’t stretch it beyond reasonable limits. A single business that combines dog walking and web design is just too far fetched. But that combination might very well stand up if you design only for pet stores and pet services.

 
7. Why do you watch TV, rent DVDs, see a movie? If it’s just for fun, no tax deduction. However, if seeing the visual art of others is vital to your own creativity, keeps you abreast of current design trends, or clues you in to the latest fashion, then consider the costs a tax deduction.

8. TV for research. Has the artistic void on network TV forced you to get cable? Well then, part of your monthly cable cost is a business deduction. And remember, the business use portion of the cost of your TV and DVD player is also a business expense.

9. Are you allowed to deduct a gift basket of fruit to Grandma? Of course you are -- if Gram has some connection to your business. Did she show you how to hook up your scanner? Make curtains for your office?

You’re an indie business and even though you may have a personal relationship with someone, that does not rule out also having a business relationship. This is particularly pertinent in gift-giving. Of course, if you bought your client a basket of fruit as a birthday present you would treat it as a business gift deduction. But what about the friends with whom you have a business connection? If dinner at a friend’s house were planned so that she could help you with your Webby's submission, then the chocolate you arrived with is a business gift.

Of course, all the costs related to your Webby’s submission are business expenses. And when you’re the winner and head to the awards event this spring, well, your travel expenses are also deductible.

10. Deduct your laundry and dry-cleaning. Spill ink or red wine on your white silk blouse while attending an awards event? Dry cleaning and laundry while on a business trip are deductible expenses. You may also deduct the costs of the first dry cleaning bill after you return home.

But don’t get too creative and save all your winter’s dirty clothes for cleaning the day after you return from a 3-day workshop.

11. Just starting out? Final Cut Pro and Adobe After Effects not bringing in the bucks yet? No problem. Even if you haven’t yet made your first dollar as a graphic designer you may still deduct your expenses. As long as your goal is to make money, you’re in business – whether you actually make any money or not.

12. Invite the public! If your Grand Opening or gallery show is open to the public you may deduct the entire cost of food and liquor served. If it is for invited guests only, you may deduct only 50% of your costs. Note, it doesn’t matter how many people actually attend the function.

13. Discuss these ideas with your tax pro before incorporating them into your business. That’s the most important tip of all. If your tax pro isn’t aware of them … time to get a new pro!

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http://www.IRS.gov/businesses/small/index.html

The homeland for all reliable resources and forms for the self employed. You should have this bookmarked! Forms, FAQ’s, phone numbers, event listings and more. It’s worth a visit just to see what they offer. The following are some events of interest from the official IRS.gov website:

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