Because most tax cheats fall under the category of self-employed, it’s really no wonder the IRS keeps close tabs on freelancers. Many of my freelance buddies worry about being audited, but here’s the thing: if you’ve done nothing wrong, you don’t have to sweat the audit threat.

Keep records and receipts.

In the event of an audit, your documentation will save you. Stay well organized and keep proper records throughout the year, and you’ll have nothing to worry about come tax time or in the event of an audit.

Report all your income.

Even though your clients aren’t required to report you as an independent contractor unless you’ve earned $600 or more dollars in one year, you’re still responsible to report this income to the IRS. A few dollars here and there add up, and the IRS is more than aware that many freelancers earn their money one small job at a time.

Don’t go dishonest deduction crazy.

Obviously, don’t try to claim deductions for things you didn’t really pay for. But beyond that, use common sense in choosing what to claim. The IRS might let a hundred dollars worth of magazine subscriptions slide for a freelance writer turning a decent profit. If you’ve never sold an article, the IRS will wonder what five hundred dollars worth of magazine subscriptions are being used for. As long as you’re prepared to prove what you use should an auditing agent pay a house call, you have nothing to worry about.

Want to learn more about paying taxes as a freelance writer?

We’ve got some great articles at write-from-home.com:

How to File Taxes as a Freelancer: An Overview By Katharine Swan
Filing Taxes as a Freelancer: How Deductions Work By Katharine Swan
Taxes for Writers: Paying Your Estimated Tax By Katharine Swan
Paying Taxes as a Freelance Writer By Patricia Telesco