I'm hoping to do some traveling this year, and if I do, I'll definitely milk some articles out of the deal. I've written and sold travel articles before - I'd say it's one of my three or four top subjects to write about.
Does anyone know if you can write off part of the costs of a trip, airfare, hotel, etc., as a business expense for freelance writing purposes according to US tax law? I don't want to start any trouble with the IRS, but I'd also like to take advantage of any available write-offs.
Write-offs for freelance articles?
Moderators: Celeste Stewart, Ed
Re: Write-offs for freelance articles?
Can you do it? Yeah. Will it escape scrutiny or withstand an audit? Questionable.
Until you've formally organized your freelancing efforts under the banner of a Sole Proprietorship or some other officially recognized business designation you're usually not technically entitled to start taking deductions. In addition, taking deductions as a self-employed person can also mean you're suddenly on the hook for all sorts of employer-targeted payroll and other taxes, so it's not always to your benefit even if you do get away with it.
*edit* That's a confusing paragraph up above. Let me try to restate. It is possible to declare yourself a freelancer and take appropriate deductions for it, but the sticking point is that you have to actually be taking in freelance income. That wide-open door of "omg so many things can be deducted!!!!" doesn't generally open up until you are organized as an actual self-employed business. When you're talking about just being a freelancer in that you pick up a gig here and there and sell some articles on CC, in the IRS' eyes your deductions are much less likely to be valid. Trying to deduct as much as, or more than your actual freelance income is a sure ticket to audit town.
A Sole Proprietorship or officially registered business is given much more leeway to operate at a loss, i.e., take generous deductions without correspondingly generous income. A simple individual self-declared freelancer has to walk a much narrower line. Trying to deduct some significant portion of a trip that may cost you hundreds or thousands of dollars and using a couple content farm article sales as the justification is unlikely to fly in the IRS offices.
It's a real hazy area of the tax code, but the IRS is much more likely to crack down on you because of that. Just declaring "I'm a freeeeelaaancer!" won't generally be enough if the IRS comes sniffing around. Best bet is to show all your numbers to a CPA familiar with the specifics of your situation and let them tell you whether or not it's even worth trying in the end. Preferably an independent CPA who's an actual CPA. Anybody associated with H&R Block or some similar corporate-y tax prep outfit is going to be super eager to tell you "yes" about every deduction under the sun, even when the IRS is probably going to be much less enthusiastic.
Until you've formally organized your freelancing efforts under the banner of a Sole Proprietorship or some other officially recognized business designation you're usually not technically entitled to start taking deductions. In addition, taking deductions as a self-employed person can also mean you're suddenly on the hook for all sorts of employer-targeted payroll and other taxes, so it's not always to your benefit even if you do get away with it.
*edit* That's a confusing paragraph up above. Let me try to restate. It is possible to declare yourself a freelancer and take appropriate deductions for it, but the sticking point is that you have to actually be taking in freelance income. That wide-open door of "omg so many things can be deducted!!!!" doesn't generally open up until you are organized as an actual self-employed business. When you're talking about just being a freelancer in that you pick up a gig here and there and sell some articles on CC, in the IRS' eyes your deductions are much less likely to be valid. Trying to deduct as much as, or more than your actual freelance income is a sure ticket to audit town.
A Sole Proprietorship or officially registered business is given much more leeway to operate at a loss, i.e., take generous deductions without correspondingly generous income. A simple individual self-declared freelancer has to walk a much narrower line. Trying to deduct some significant portion of a trip that may cost you hundreds or thousands of dollars and using a couple content farm article sales as the justification is unlikely to fly in the IRS offices.
It's a real hazy area of the tax code, but the IRS is much more likely to crack down on you because of that. Just declaring "I'm a freeeeelaaancer!" won't generally be enough if the IRS comes sniffing around. Best bet is to show all your numbers to a CPA familiar with the specifics of your situation and let them tell you whether or not it's even worth trying in the end. Preferably an independent CPA who's an actual CPA. Anybody associated with H&R Block or some similar corporate-y tax prep outfit is going to be super eager to tell you "yes" about every deduction under the sun, even when the IRS is probably going to be much less enthusiastic.
Re: Write-offs for freelance articles?
Just to add to what SMichael said, you have to be earning enough of an income that it counts as a business and not a profit (or loss)-generating hobby. There's a few basic rules that I don't remember, but I wouldn't bother with trying to sort it all out unless freelancing is at least 10 or 20% of your total income... and even then, it might not be worth it as it greatly increases your risk for an audit.
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Judith
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Re: Write-offs for freelance articles?
I've been in the travel writing business a long time, and if you plan ahead and know where you are going and what you'll be doing... you can often get a lot of freebies... free plane tickets, free hotel, and a whole lot of free food... Sell your articles before the trip...
Re: Write-offs for freelance articles?
Thanks for the warnings. I think I'll just take this trip and not worry about the expense too much - I don't want to face the risks of an audit. I did write off a laptop purchase as a business expense last year and the IRS seemed to accept it as legit, but it was a cheap netbook and I use it almost exclusively for writing. A trip that costs five or ten times as much and is quite a bit harder to argue for as "business-related" isn't going to work out the same way.
As for getting all that free stuff, this trip is a somewhat last-minute deal, so that's probably not happening. I'm hoping to make up some of the expense by selling articles after I return, though.
As for getting all that free stuff, this trip is a somewhat last-minute deal, so that's probably not happening. I'm hoping to make up some of the expense by selling articles after I return, though.