As a freelancer, you can design your own schedule, work space and tool set. When you realize this fact, you can create a fringe benefit plan amounting to low- or even zero-cost perks.
For instance, let’s say you’re an independent designer who routinely does costly printing for clients — and you also like to travel. You can write contracts that allow you to control all printing and production, so costs run through you with a slight markup. Then, use a travel rewards card as your business credit card and run all your production costs through that account. Before long, you’ll have clients paying for your travel habit, a fringe benefit that might be tougher to get if you were employed full-time by an agency.
Here are three ideas for creating a fringe benefit plan that’s also good for your business:
1. Invest in Your Surroundings
I’m a big coffee drinker. I also work at home with my wife, who also freelances. It’s no surprise we claim a home office deduction on our corporate tax return, since our “offices” are only steps away from our bedroom. Accordingly, items we buy to outfit the office are as tax-deductible for us as they are for anyone else who pays for office space — including the coffee. So, as a fringe benefit, I splurge a bit and buy the kind we like most.
This same thinking applies if you work in an unfinished basement and need a space heater, or if you have a weak back and need an expensive, ergonomic chair. Invest in things that make you want to spent time in your office.
2. Buy Benefits Supporting the Lifestyle You Want
What type of freelancer are you? Do you work from home like me? Or maybe you roam the planet as a nomad? Your fringe benefit plan should fit the type of life you want to live as a freelancer.
If you’re a freelance photographer who’s often required to go on location, for example, buy bags and luggage that make flying and driving easy and comfortable. Presuming you travel, these purchases qualify as “equipment,” so you’ll receive a fat deduction for upgrading your travel accessories.
Conversely, if you’re the type who spends all day chained to a desk and needs a workout to get blood flowing again, buy a health insurance plan that offers reimbursement for a gym membership. You’ll likely need to buy insurance as a freelancer, anyway; why not get a plan that will pay for exactly what you need?
3. Align Your Training With Your Interests
We all need professional training. Freelance developers learn new programming languages. Freelance designers learn new software and techniques. Freelance writers attend workshop conferences. Your training is a business expense, and you should treat it as such. But what if the 10-day conference you want to attend is in Hawaii? As long as the first six days of your trip are spent in professional development, you can take the write-off and spend the remainder relaxing on the beach.
Get the idea? Imagination and tax law are the only real limits on your creativity in this area, so dream big — and then consult an accountant to make sure your Big Idea won’t get you into Big Trouble with Uncle Sam. The rest, as with everything in freelancing, is up to you.