Mastering Taxes as a Creative: What You Can Do Now to Make Tax Time Easier

Boooooo. It’s probably the last thing you want to think about right now. After all, it’s not even tax season yet (starts mid-to-late January, when the IRS begins accepting returns, and runs through April 15th). But getting a head start on tax preparation during these last few months of the year can save you a ton of future headaches (and maybe even some money) when those deadlines finally roll around.

If you’re a creative professional—whether you’re a musician, designer, visual artist, or content creator—taxes can be extra tricky. Irregular income, multiple income sources, and complex deductions can make it hard to keep everything straight. The good news? Taking a few small steps now will make the process so much easier come tax season. Here are some practical things you can do right now to set yourself up for a smooth and painless tax filing experience next year.

1. Review and Organize Your Financial Records

One of the best gifts you can give your future self is a well-organized set of financial records. Think of this as your "Marie Kondo" moment—tidying up and bringing order to your financial chaos. Gather all your invoices, receipts, and bank statements for the year, and take a few hours to categorize them. Are these expenses business-related or personal? Are you missing any receipts for big expenses?

Getting this done now will save you hours of frustration come tax time and help you find those sneaky little deductions you might have overlooked. Consider using a bookkeeping software or even a simple spreadsheet to track and categorize expenses month-by-month. Your accountant (or you, if you’re DIY-ing your taxes) will thank you later! We made one for you here.

Keep a digital record of everything. There are so many free apps out there or even taking photos of receipts with your phone can help you stay organized and avoid that dreaded shoebox of crumpled receipts.

2. Estimate Your Income and Tax Liability

I know it’s tempting to avoid looking at your total income until the very last minute, but now’s the time to take a peek. Review your total income for the year, and estimate your tax liability based on your business expenses and deductions. This is a critical step for freelancers and self-employed creatives since your income might have gone up or down significantly compared to last year.

Estimating your tax liability helps you avoid surprises during tax season and gives you a clear picture of where you stand. Use last year’s tax return as a starting point, but adjust for any changes this year, like new sources of income or additional expenses.

If you’ve had a really great year financially, consider setting aside a little extra cash or making an additional estimated tax payment. It’s better to be overprepared than to be hit with a surprise bill (and penalties!) in April. One thing I used to do was put aside half of all income that came in, dramatic I know, but I didn't want to be shocked (or without enough cash) when it was time to pay the piper.

3. Maximize End-of-Year Deductions

Want to make your taxable income go down and your tax refund go up? Then it’s time to take a close look at your expenses before the year ends. Are there business-related costs you’ve been putting off? Need a new camera or some updated software? Now might be the perfect time to make those purchases.

Review your current expenses and see if there are deductions you can maximize. Prepay for upcoming services, like subscriptions or marketing expenses, or pay off any outstanding bills to increase your deductions this year. Even small expenses can add up and reduce your taxable income.

Consider making charitable contributions before December 31st. Not only is it a good deed, but it could also provide a nice tax deduction if you itemize.

4. Review Your Estimated Tax Payments

If you’re self-employed or a freelancer, you’ve probably made quarterly estimated tax payments throughout the year. Now’s the time to double-check that you’ve paid enough to cover your expected tax liability. If your business did particularly well this year, you might want to consider making an additional payment to avoid underpayment penalties.

Take a look at IRS Form 1040-ES to recalculate your quarterly estimated taxes based on your current income. This might seem tedious, but it’s much better to catch any shortfall now rather than scrambling to come up with extra funds in April.

If you’re unsure whether you’ve made enough payments, consider working with an accountant to review your figures. Sometimes a quick review can save you from a hefty penalty.

5. Contribute to Retirement Accounts

You might not be thinking about retirement now, but future you will definitely appreciate it if you do! Contributions to retirement accounts like a SEP IRA, Solo 401(k), or traditional IRA can reduce your taxable income for the year, making it a win-win. Plus, these contributions help you build long-term financial security even if your income varies from year to year.

Check how much you’ve contributed so far, and see if you can max out your contributions before the year ends. Every little bit helps, and the tax savings alone can be worth it.

If you haven’t opened a retirement account yet, now’s a great time to start. Even small, regular contributions can grow significantly over time thanks to compounding interest.

6. Plan for Home Office Deductions

If you’ve been using a dedicated space in your home exclusively for your creative work, you might qualify for the home office deduction. This deduction allows you to write off a portion of your rent or mortgage, utilities, and other home expenses.

Make sure your home office meets the IRS requirements and calculate your home office expenses now. If calculating actual expenses seems like a headache, you can use the simplified home office deduction, which allows for a standard deduction of $5 per square foot, up to 300 square feet. Even if you work from your kitchen table (I mean, who doesn't), consider whether you have a dedicated space for your work. The home office deduction can add up to significant savings, so it’s worth exploring.

7. Verify All 1099 Forms and Client Payments

As a freelancer or creative professional, you’ll likely receive 1099 forms from clients you’ve worked with throughout the year. Make sure you have received all expected 1099s, and cross-check them with your records to ensure they match.

If any forms are missing or if the income reported doesn’t align with your own records, now’s the time to address those discrepancies with clients. This will save you a headache during tax season and ensure that your reported income is accurate.

Create a simple spreadsheet to track expected 1099 forms, and make note of any payments received that weren’t accompanied by a 1099. This will help you quickly identify any discrepancies.

Final Thoughts: Preparing Now Means a Smoother Tax Season Later

Preparing for tax season as a creative professional doesn’t have to be a dreaded chore. By taking these steps now, you’re not only making the process easier on yourself, but you’re also setting yourself up for greater financial success and peace of mind. After all, the less time you spend worrying about taxes, the more time you have to create!