{"id":1929,"date":"2014-04-15T15:56:24","date_gmt":"2014-04-15T15:56:24","guid":{"rendered":"https:\/\/www.zilliondesigns.com\/blog\/?p=1929"},"modified":"2026-03-25T07:50:02","modified_gmt":"2026-03-25T07:50:02","slug":"10-tax-tips-to-us-designers-that-help-you-avoid-audits-by-the-irs","status":"publish","type":"post","link":"https:\/\/www.zilliondesigns.com\/blog\/10-tax-tips-to-us-designers-that-help-you-avoid-audits-by-the-irs\/","title":{"rendered":"10 Tax Tips to US Designers that help you Avoid Audits by the IRS"},"content":{"rendered":"

You need to rush – April 15th<\/sup> is approaching, and you haven\u2019t found anyone to help you with filing your taxes for your freelance design business. You are unprepared, and now you have to dig through your records for every last detail. You think you have it all set. You decide to file them yourself and manage to send the forms in before the deadline.<\/p>\n

Knock, knock! The IRS is at your door.<\/p>\n

Your last-minute filing has cost your business a nice chunk of your profits. The IRS doesn\u2019t care about your story; they want their money. They want to audit your business because of several questionable mistakes, and demand that you hand over all forms and records.<\/p>\n

Save yourself the headache of an audit and check out these last-minute tips you should know before you file.<\/p>\n

Is your tax preparer right for you?<\/h2>\n

As your business grows more successful, it also becomes more complicated to file your taxes. You should take your time to find the right CPA or major accounting firm for you. One advantage of hiring a CPA, they will take more time with your taxes than a firm and you can rest easy knowing that your taxes are properly handled. However it will cost you more money. If you want your taxes done as soon as possible because you are late, an accounting firm is your best option.<\/p>\n

Warning: Don\u2019t be late when filing your taxes! Not only will you be charged fees for late returns, you can also raise red flags if you have mathematical mistakes or other general errors because you rushed the return in.<\/p>\n

Keep it simple<\/h2>\n

Last year went well for you, you now manage multiple little business ventures you started separately, such as web design, logo design, stationary, and more. Accounting software for multiple businesses<\/a> can help simplify your record-keeping by grouping them together under a single business entity. It makes tax filing easier and can give you more options for deductions, potentially leading to a bigger tax return check.<\/p>\n

\"Make
Source: ThinkStock\/thomas-bethge<\/p>\n

The two office dilemma- work office and other<\/h2>\n

The IRS has lightened up on home offices as an audit alert, that\u2019s the good news. To be eligible for this deduction, the space you set aside is used strictly for your business, and you need to keep careful track of all the expenses associated with running that office. Everything you do there is carefully documented because if you do receive a notice from the IRS about an upcoming audit, they will look at your records.<\/p>\n

The bad news, be careful about sharing a home office. Your office must be yours and yours only, and if do you share the room, have separate desks, filing cabinets, and keep separate records.<\/p>\n

Payment services online<\/h2>\n

Any crowdsourced website or pay service website will keep strict records of money because they are protecting themselves from auditing.  These businesses will keep their records correct and true, so don\u2019t lie about what you got from them.<\/p>\n

In the US, funds raised on Kickstarter are income. A Kickstarter creator can offset the income from their project with deductible expenses related to the project, and accounted for in the same tax year.<\/p>\n

If you accept payment through the Paypal website or any pay services site, no matter how much or how little business you have transacted over the site in the course of the year, you can write off those fees the same way big businesses are able to deduct credit card convenience fees. It counts as a \u201cnecessary cost of business.\u201d<\/p>\n

The easiest way to document fees is to wait until the end of the year and print out your account history.<\/p>\n

Watch your tax write-offs!<\/h2>\n

Record all expenses related to your freelance design business so that you can write them off of your gross income. Your dinner date with your mother doesn\u2019t count, but your luncheon with a client does.<\/p>\n

Some of the expenses you need to keep track of should include:<\/p>\n