Tax Tips for Freelancers

Optimize your taxes

The tax authorities offer various deductions for independent entrepreneurs in order to keep the taxes to be paid lower. For these deductions, however, there is a requirement you must meet. It’s important that you meet the hour criterion. For 2024, this means that you must have spent a minimum of 1.225 hours on your business in the calendar year. As long as you meet this condition, you can use the following deductions.

Self-employment deduction, this allows you to have €3.750 deducted from your taxable income as an independent entrepreneur. Please note that this deduction will drop in amount over the next few years, so make use of it while you still can. As of 2027, the new amount is only €900.

Starter deduction, increase the self-employment deduction! This deduction comes with two additional conditions. You must truly be a starter, or in other words, you must be in your first five years of entrepreneurship, and the other condition is that you have used the self-employment deduction no more than twice in the last five years. If you can say “yes” to both conditions, you may use the starter deduction. On top of the self-employment deduction, you can deduct €2.123 from your taxable income. Note that you may use this deduction up to three times.

Corporate expenses, these are also deductible. This is the VAT for office supplies, such as laptops, phones and cars. Keep receipts and possible invoices. You must show these as proof when filing returns.

In addition to deductions, you also have exemptions that can help a lot. One is the SME profit exemption. This allows you to ignore, not tax, 13.31% of profits.

Bookkeeping pointers

With your own business comes the responsibility of keeping your own bookkeeping in order. You can outsource this, of course, but that costs money and not every business owner can afford it. The tax authorities place certain requirements on bookkeeping. A few examples of these requirements are a clear record of hours, invoices and bank statements, proof of possible travel expenses and finally other receipts of, for example, office supplies. Especially the record of hours can be tricky to maintain. Try to update it daily or weekly to keep it well-organized. What are the most important aspects of such a log of hours? What tasks did you perform on the day and how many hours did you actually spend on them.

Another thing that could help keep your bookkeeping clear is a business account. It makes it easier to keep private and business expenses separate.

Start saving for retirement

It’s now your job to save for your retirement. Fortunately, the tax authorities are also lending a hand here. You can set aside part of your income for your pension. This is called (fiscal) annual allowance. Exactly how much you can set aside is calculated with your income from last year.