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Megan C
Megan C, Certified Public Accountant (CPA)
Category: Finance
Satisfied Customers: 16544
Experience:  Licensed CPA, CFE, CMA, CGMA who teaches accounting courses at Master's Level
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I live in Kenmore, Washington. Ive been doing freelance writing

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I live in Kenmore, Washington. I've been doing freelance writing work for clients found through websites like Textbroker and Writer Access. I do this work from my home. Do I have to obtain a business license to legally do this work? I'm also unsure of what what my tax situation is going to be. I know there is self employment tax involved, and I believe it's going to involve my profits minus what my expenses are. I'm not sure what I can actually claim as legitimate business expenses. I'd appreciate any light that can be shed on this. Thank you.

MyVirtualCPA :

Thank you for your question, and thanks for using JustAnswer.com. You would not need a business license to do this type of work, so no worries there. However, let's take a few moments to speak about your taxes.

MyVirtualCPA :

You can deduct any expense that is ordinary and required in order to generate income.

MyVirtualCPA :

This means you can deduct the cost of your computer (through depreciation), and the cost of your home office

MyVirtualCPA :

You can deduct any subscriptions you have to databases you need for your writing

MyVirtualCPA :

you can deduct the cost of your home office

MyVirtualCPA :

YOu can deduct any miles you may drive as a result of this work,

MyVirtualCPA :

Here is a list of common tax deductions for freelance writers: http://freelancewrite.about.com/od/taxes/a/Common-Expenses-Of-Freelance-Writers.htm

MyVirtualCPA :

Is there anything else that I can assist you with tonight?

MyVirtualCPA :

If not, please rate as "excellent" so that I may receive credit for assisting you today

Customer:

How would I factor in depreciation when it comes to the cost of my computer?

MyVirtualCPA :

Well, when you use tax software you will enter in your purchase amount, and tell it when you purchased it an the software will compute it for you

Customer:

Ah okay. Makes sense.

Megan C and other Finance Specialists are ready to help you
Thank you for the positive rating. If you ever need another question answered please ask for me. I also can answer any social security or tax question that you may need answered in the future. It was a pleasure working with you and I hope you have a great night.

Thanks again.