Tax Deductions For Home Based Graphic Designers - RD018

01/14/16 • 29 min

Resourceful Designer: Strategies for running a graphic design business

Tax Deductions For Home Based Graphic Designers

It's that time of the year again. The holiday season is behind you and the calendar has reset once again. Your New Year's resolutions are made, some of which you may have already broken. And you've gotten back to the grindstone running your graphic design business. It can only mean one thing. Tax season is almost upon you.

Running a home based graphic design business has many perks. You are your own boss. You make your own hours. You choose the clients you want to work with. You can work in your Pjs if you want to. But one of the often overlooked perks associated with running a home based graphic design business is all the tax deductions you can claim.

In this week's episode of the Resourceful Designer podcast I talk about various tax deductions for home based graphic designers. There are many things that designers don't realize are tax deductible. Such as house plants or your Netflix subscription (you did watch that design related documentary didn't you?)

You can find tax deductions all around your home if you know where to look. Here are just a few of the ones I share with you in the podcast.

Home Office

Your home office or design studio as I like to call mine is filled with tax deductions. Everything from your desk and chair, the carpet, filing cabinets and even the artwork and knick knacks that decorate the space. And don't forget to deduct any renovation or improvement costs you incur for your work space.

Home Expenses

Since you spend a good part of your day working from home it only makes sense that you can claim tax deductions for some of your home expenses. Include things like Mortgage/rent, utilities, insurance, phone service, cleaning service, and even your property tax, yes, you can claim a tax deduction on the tax you pay.

Office Supplies

Everything that fills up your graphic design studio and helps you work qualifies as tax deductions. Pens, pencils, paper, printer ink, white boards, recordable media such as blank DVDs are all deductible. If you can produce a receipt for it, you can claim it.

Office Equipment

Office equipment consists of the bigger, non consumable things such as computers, external storage devices, printers, cameras, scanners and the like.

Software Tools

As graphic designers we use a lot of different software tools. Some of them directly in our design work such as design or font management software and some in running our business like file transfer services. Don't forget mobile apps that you use in your business, they are tax deductions as well.

Personal Growth

Keep receipts for every conference, webinar, class, course or whatever you attend in order to become a better designer or business person. Make sure you include travel and meal expenses incurred in your pursuit of knowledge. You can also claim tax deductions for any book, magazine, membership site, or any clubs or organizations you belong to.

Branding and Self Promotion

All your marketing material from your business cards to Facebook ads are tax deductions. So are any thank you gifts or prizes you give away in the course of business. And don't forget your website, themes, plugins etc.

Production Costs

All costs incurred in the completion of a design project are tax deductions. Proofs, stock images, the fee paid to contractors or freelancers.

Auto Expenses

Beside the cost of purchasing or leasing a vehicle you can also claim tax deductions for roadside assistance, insurance, fuel, parking and so much more.

Household Supplies

It may sound crazy, but you can find tax deductions in many of your regular household supplies such as tissue paper, soap, vacuum bags. As long as you use them during working hours or as part of your office they can be deducted.

Other

There are so many other things you can claim as tax deductions as well. Such as physical therapy, headache pills, eye drops and counselling fees.

You really need to sit down with your accountant or whoever prepares your tax return and discuss all the things you can do to get the most return on your taxes.

I would love your comments

Do you have any fancy tax deductions you use? Leave a comment below.

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Tax Deductions For Home Based Graphic Designers

You can find tax deductions all around your home if you know where to look. Here are just a few of the ones I share with you in the podcast.

Home Office

Home Expenses

Office Supplies

Office Equipment

Office equipment consists of the bigger, non consumable things such as computers, external storage devices, printers, cameras, scanners and the like.

Software Tools

Personal Growth

Branding and Self Promotion

Production Costs

All costs incurred in the completion of a design project are tax deductions. Proofs, stock images, the fee paid to contractors or freelancers.

Auto Expenses

Beside the cost of purchasing or leasing a vehicle you can also claim tax deductions for roadside assistance, insurance, fuel, parking and so much more.

Household Supplies

Other

There are so many other things you can claim as tax deductions as well. Such as physical therapy, headache pills, eye drops and counselling fees.

You really need to sit down with your accountant or whoever prepares your tax return and discuss all the things you can do to get the most return on your taxes.

I would love your comments

Do you have any fancy tax deductions you use? Leave a comment below.

Four Week Marketing Boost - FREE GUIDE

Download my FREE guide, the Four Week Marketing Boost to help improve your business' image and create the best first impression possible to attract more clients.

Subscribe to the podcast

Subscribe on iTunesSubscribe on Stitcher Subscribe on Android

Contact me

Send me

Previous Episode

Being A Freelance Graphic Designer Could Hurt Your Business - RD017

Being A Freelance Graphic Designer Could Hurt Your Business

Do you call yourself a freelance graphic designer? Freelance web designer? Or freelance web developer? If you do I suggest you stop right now. I could be hurting your business.

Let me share an email conversation (names withheld) I had with a potential client before the holidays...

Mark,

As you may or may not know, (graphic designer's name) is undergoing surgery in January and will be off for 3 months. I would like to know if you are available to cover for him while he's away.

To wich I replied,

Thank you for thinking of me. I hope all goes well with (graphic designer)'s surgery. Due to the nature of my business and my commitment to my clients I wouldn't be able to take leave for 3 months.

I do however know a graphic designer that would be perfect for you to contact. She is from this area but has spent the last few years working in Montreal. She recently moved back to town and contacted me to let me know she was looking for work. Here is a link to her resume website with all her contact info.

To my surprise this is the reply I got.

Thank you Mark for your prompt reply. I fully understand that you could not abandon your business for 3 months.

Thank you for the tip on (designer's name). I looked over her resume, and although she looks to have the qualifications we need, she calls herself a freelance graphic designer. I'm looking for someone who takes the job more seriously than that.

Regards,

I couldn't believe what I read. This woman was perfect for the job but he wouldn't consider her because she called herself a freelance graphic designer.

What is a freelance graphic designer?

According to Merriam-Webster the definition of a freelancer is: A person who acts independently without being affiliated with or authorized by an organization. This person pursues a profession without a long-term commitment to any one employer.

Isn't that what we are? The answer is yes. Unfortunately the word freelance has a stigma to that makes it an unfavourable word for potential graphic design clients to accept. Some businesses even have a not freelancer policy when it comes to hiring contractors.

Freelancers are often seen as being rebels, risky, lazy, overly proud and hard to get along with. Some potential clients even associate the term freelancer with amateur. Something you don't want associated with your business.

Being a freelance graphic designer means you are replaceable. You are one in a long list of graphic designers a company could turn to in a pinch for a quick one time job.

Why do we burden ourselves with this title?

There was a time when being a freelancer was something exotic, mysterious even. When working for yourself was something that set you apart from the masses. But nowadays, more and more people are going into business for themselves and the novelty has worn off.

There are many professions that follow the same format that we graphic designers do but don't use the term freelancer. Can you imagine trusting your money to a freelance financial planner? Would you trust your locks to a freelance hair stylist? I didn't think so.

What should you call yourself?

When someone asks you what you do, just tell them. You are a graphic designer, a web designer, a web developer or whatever it may be. If they are interested they will ask who you work for. At which time you can explain that you run your own design business. As a graphic design business owner you can explain how you help your clients find solutions to problems they face, which justifies the amount you charge.

By stating you are a business owner you are giving yourself instant credibility and proof that you take what you do seriously. It also establishes you as a professional.

No matter how you refer to yourself, your livelihood doesn’t depend on how you see yourself, but on how your graphic design clients see you and your work. So don't be afraid to tell people you are a graphic designer and a business owner.

Just leave the "freelance" part out of it.

I would love your comments

How do you refer to yourself? Leave a comment on the show notes page.

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Next Episode

Are Your Communication Skills Scaring Away Design Clients? - RD019

Are Your Communication Skills Scaring Away Design Clients?

When it comes to running a graphic design business, It's not just your creativity or your design skills that determine if you succeed or not. Your communications skills play a major role in the outcome of your business. Communications skills that are required when dealing with potential design clients.

The fact is, without good communications skills, you'll have a hard time finding and retaining graphic design clients.

I recently read a blog post by Felipe Mandujano titled Finding clients may not be your biggest problem. In it Felipe tells us how, by looking closely at himself, he was able to discover the flaws in his communication skills and address them over time. Felipe's article gave me the inspiration for the podcast episode. Please listen to the episode as I dive much deeper into the subject than I do in this post.

Why is it that finding new design clients comes easier to some designer than others?

Let me ask you a question. Do you consider yourself an Introvert or and Extrovert?

If you said Introvert, you're not alone. Did you know that the majority of graphic designers are introverts? Remember, being an introvert doesn't necessarily mean that you're shy, just that you're more comfortable being along. Because of that desire to be alone, you may not have developed the communication skills necessary to really succeed as a home based graphic designer. That's what I discuss in this podcast episode.

If you replied Extrovert to the above question I encourage you I stick around and listen to the podcast anyway. You may gain some insight that will help you in your business as well.

Being an introvert.

One of the issues with being an introvert is that you don't like to venture too far out of your comfort zone. You can easily immerse yourself at your computer, your sketchpad or easel. but when it comes to dealing with clients you're not that comfortable.

That's why you see many design teams, where one team member designs while the other has the communication skills to deal with the clients. Each member has their own skill sets and works within them.

But not ever designer has the benefit of working with a business partner who can handle the clients for them. Most home based graphic designers are like me, running the business all alone.

And that is where the problem lies if you're an introvert. If you have trouble expressing yourself and communicating with clients it can come across as a lack of confidence. If a client ask you a question and you hesitate or hum and haw about the answer, they may think you don't know what you're doing and decide to look elsewhere for answers.

It doesn't matter how good a designer you are. Clients don't want to deal with someone who appears to lacks self confidence and doesn't have the communication skills to talk to them.

If you ever feel this way yourself I have some good news for you. You can overcome this and develop the communication skills necessary to succeed. It does require you to step out of your comfort zone but it is doable.

Here's some homework to improve your communication skills.

I want you to play a little game. The next time you find yourself at a checkout counter, I want you to say hi to the cashier before they say it to you. That's all there is to it. Beat them to the greeting. Cashiers have been trained to greet each customer they see so you know as you approach them that a "hello" is coming. So why not initiate it yourself? Believe it or not, but taking the leap and saying "hi" first will boost your confidence the more you do it.

If you want to take this game to the next level continue the conversation with what comes naturally after the greeting. Ask the cashier about their day before they ask you. It's an insignificant conversation but doing this over and over will boost your communication skills.

For an even bigger challenge, say hi to people in line with you, or in the elevator with you. Anytime you find yourself next to someone with a few seconds to spare say hi to them instead of just standing there in silence. You don't even have to go beyond the greeting and converse with them. The process of greeting someone is a great way to over come the fear and self doubt when dealing with strangers. And the more you do this, the more comfortable you'll be the next time you talk to a potential client.

Other things you can try.

Participate in design groups like the ones on Facebook or Linkedin. Talking with other designers online may be more comfortable for you and will help build your communication skills.

Find yourself a colleague or mentor you can talk to. So...