Thursday, January 12, 2012

Writers, Bookkeeping, and Tax Time: The Business Side of Writing

Writers tend to forget that what we do is not only creative, informative, and entertaining, but also business – a small business, yes, but also a serious business. And if you're the type of writer I am, though you write a LOT, you probably get paid very little for your efforts. However, you still need to keep track of what you make in order to prevent an audit.

I'm looking forward to the day when I can actually make enough money to file an income tax return, because making that much money will mean that I can deduct a portion of my mortgage, heat, electricity, telephone expenses, other household expenses, all writing related products, the cost of relevant transportation, and so much more.

However, I would have to develop better bookkeeping skills, because I doubt if my rounding up or down would please the IRS. When I add money to my checking account – let's say the amount is $20.50 – I round down and, though I record the actual amount, I add only $20 to my balance. When I write out a check for the same amount, I record the actual amount, but I subtract $21 from my balance. 

By recording money in my checkbook in that manner, I have hidden money that acts as a buffer to protect my account from becoming overdrawn. But my method isn't accurate and it won't help at income tax time. 

One of my previous employers had considered me for the company's bookkeeping job (in addition to my designing job) until she discovered my method of bookkeeping. Though I told her I would alter my methods for her, she thought I might be better suited for designing.

A lot of writers write for more than one site and have a portfolio of organizations who use their services. Keeping track of income and expenses makes good business sense, but for writers devoted to their art, bookkeeping and budgeting can seem a little out of our comfort zone and a lot overwhelming. Besides, we have WORK to do and taking time away from writing means making less money.

However, for those of us who have difficulty with bookkeeping tasks, investing in a program that helps us perform those tasks relieves us of that duty. I'm all for anything that helps me focus on what I really enjoy – writing, while giving a bookkeeping software program the job of handling the details for me –  bookkeeping.

So if you're a writer who actually makes a living at writing and you enjoy writing more than you enjoy accounting, consider using a program that will lighten your load.

Here's something that might bring a smile to your face: This year we have been given three extra days to file our taxes! Why? February gives us one extra day this year (2012 is Leap Year), April 15 falls on a Sunday, and April 16 is a federal holiday (Emancipation Day).


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