Are you a freelancer who is dreading the income tax deadline this year? If so, your concern is understandable since freelancers are among the most frequently audited taxpayers. The good news is that you can successfully navigate your way through the income tax code and avoid the traps that catch so many of your colleagues.

Possible Tax Pitfalls for Freelancers

The federal income tax code is full of potential snares for freelancers but the two biggest problems areas are estimated taxes and risk of being audited. Generally, if you expect to owe more than $1,000 in tax during the tax year, then you'll need to make estimated tax payments. The IRS requires that self-employed taxpayers pay their own share of Social Security and Medicare taxes, as well as the portion that an employer would normally cover. The effective tax rate equals over 13 percent for these individuals.

To comply with the IRS requirements for estimated taxes, you'll need to take your total projected income, calculate the 13 percent tax, and then divide the total by four. After you've figured this amount, simply send in one portion each quarter along with the appropriate tax voucher.

Risk of auditing is another possible concern for freelancers at tax time. Since freelancers are considered self-employed, the IRS may decide to take a closer look at some of the deductions you claim. It's always advisable to keep receipts for all of your major deductions for up to three years. If you're audited by the IRS, you'll be able to use the documentation to support your claims.

How to Claim Common Freelance Tax Deductions

What are some common freelancer tax deductions you might claim on your return? One typical deduction that can trip up freelancers is business use of home, often referred to as the "home office" deduction. Despite concerns about high audit risks from this deduction, there's no reason not to claim this expense if you can legitimately do so. The key is making sure that the area you are deducting is exclusively and regularly used for business. So, if you have a room in your home set aside just for work purposes, then you can probably take the deduction.

Travel expenses are also a common write off for freelancers. However, if you spend part of your time on the road sightseeing and part of the time transacting business, then you'll have to separate the personal expenses from the business ones before you can write them off. The same is true for your dining costs on business trips.

The federal income tax code can pose all kinds of hidden dangers to freelancers, but you can sidestep many of the problem areas if you find out which deductions apply to you, back your claims up with receipts, and file your return on time this year.

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