Income Tax Returns for Freelance Marketers – 3 Simple Steps

Income Tax Returns for Freelance Marketers

Recently, we have seen significant changes in the way the world does business due to the global pandemic. Now more than ever, companies are reaching out to marketing professionals to help them keep old customers, attract new ones, and promote their services in a new way. As a result, more marketing professionals are taking on freelance work and offering digital consulting services.

However, if you have just started working as a marketing consultant, or if you are new to the world of freelancing, you may not be aware of the income tax return requirements associated with carrying out this work.

That is where we come in.

Our expert accountants work with a wide range of freelance marketing, media, and sales consultants to help them quickly and easily file their income tax returns each year. To get you started, we have compiled 3 basic steps that all consultants and freelancers must take when filing their income tax returns.

1. Discover whether you are a chargeable person

If you are working as a freelance marketer or consultant in Ireland, you must file an income tax return. Whether it’s full-time or part-time, online or in-person, your main job or a side gig, you must declare all income from your freelance and/or consultancy services to the Revenue Commissioners.

However, how you do this and how much you will pay in tax is dependent upon whether the Revenue Commissioners consider you a “chargeable person”.

A chargeable person is someone who earns either of the following (in addition to any PAYE income):

        – more than €5,000 tax assessable non-PAYE income, or
        – more than €30,000 gross non-PAYE income

If you are considered a chargeable person, you will file your income tax return on a Form 11. If you are not considered a chargeable person, you will still need to declare any non-PAYE income to the Revenue Commissioners by filing a Form 12.

2. Complete your Form 11

As a chargeable person, the Form 11 is the most important part of your income tax return. In the 44-page document, or the online form which has 20 sections, you will declare your income, provide the details of your work, and submit other relevant information that the Revenue Commissioners will use to calculate your tax liability. In order to ensure you are paying the right amount of tax and claiming all the deductions you are eligible for; it is essential that this form is completed fully and accurately.

However — because any incorrect information or mistake could be misinterpreted by the Revenue Commissioners as intentional and might even incur additional fines — many people seek assistance from a professional when filling out their Form 11. At Tax Return Plus, we can help you to file your Form 11 from start to finish; you just provide us with a few personal and income-related details, and we will take care of the rest.

The following is a basic list of the information you should have readily available before we commence filing your Form 11. We will send you on a template which will outline the following:

Income details:

          – Details of your trade including total sales and receipts, as well as a breakdown of total expenses.
          – Details of any other income whether taxable or not.
          – Details of any gifts/inheritances or capital gains.

3. Identify deductions and credits

People working in this field, such as web specialists, freelance content writers, and digital marketing consultants, have access to a wide range of allowable expenses and deductions that can be claimed against their income tax bills.

We always recommend consulting a tax professional during this process – as only a tax expert will be able to uncover every deduction, you are eligible for – however, we have listed here some of the most common expenses that freelancers and consultants can deduct from their tax bills.

Remember: To claim these expenses against your income tax bill, you must be able to provide proof. Make sure you keep all, invoices, receipts, bank statements and other documentation throughout the year, or your expenses may not be deductible.

Advertising Costs
Effectively promoting your business is not only critical to your success, but also a tax-deductible expense! Any costs arising from advertising in the media or directory listings, direct mailers, online promotional activity (websites, emails etc.) are all allowable expenses.

Accountancy Fees
Any fees incurred for engaging services such as accountants or tax professionals are deductible from your income tax bill.  If you wish for Tax Return Plus to file your tax return, this is an allowable expense.

Phone Bills
We know that as a freelancer, your phone is essential to your business. The good news is that the percentage of mobile phone use in relation to your job is tax-deductible. As part of Tax Return Plus’s income tax service for marketing professionals and consultants, we help to identify that percentage for you.

Home Utilities
If you conduct your business from home, you can claim any utility expenses (heat, electricity, internet) against your income tax. These expenses are allowable to the extent of business use.

Workspace Expenses
Not everyone can or wants to work from home – luckily, any expenses incurred from renting out a space for your business are also allowable. This includes bills for utilities such as heating, lighting, and internet.

Prior Year Losses
If you are just starting out, it is possible that you may not have seen any significant profits from your business yet. Any losses you have incurred in previous years can be used to offset your current year profits if they are declared to the Revenue Commissioners and ring-fenced.

As a freelancer your time is money. Do not waste your time stressing about your taxes – join the thousands of marketing and sales consultants across Ireland and trust Tax Return Plus to file your income tax return this year. Get a quick quote today.