This morning I saw a young man dressed in a long green toga wearing a a statue of liberty hat and holding a sign for Liberty Tax. That can mean only one thing: it’s tax time. It’s the wonderful time of year when we all whimper at the pile of paperwork and forms demanding our immediate attention, realizing we’ve lost most of our receipts, and we have no idea if we got all of our 1099’s and W2’s from everyone we worked for. Tax time for professional writers can be maddening.
This is also an excellent time of year to crack open that expensive bottle of scotch Uncle Jo gave us for Christmas.
When I was writing the 1st edition of What You Need to Know to Be a Pro, I decided not to include a chapter about taxes because the tax code changes all the time. There is plenty of info throughout the book about keeping track of expenses in preparation of tax season, but I skipped specific info about filing. In the 2nd edition, which will launch late spring, I will add more information about tax preparation. But the best thing all writers and publishers can do is research changes in the tax code every year that will effect writers and talk to a tax professional.
Below are links to articles on tax preparation for writers. To read the whole article, click the link.
Writer’s Relief Taxes for Creative Writers
There’s one key question to ask yourself that will help you determine whether or not you can write off your expenses, whether from self-publishing a novel or buying books of poetry: Are you writing to start or maintain a business, or are you writing as a hobby?
The difference (for the government, anyway) comes down to one word: Profit. If you’re writing with the intention of turning a profit (starting a business), then you’re allowed to write off your expenses. If you’re writing because you enjoy it, but you’re not making a focused effort at turning a profit and you never expect to, then the government doesn’t want you to write off your writing expenses.
Writing.org Taxes for Freelancers
Did you earn your first income from freelancing last year? If so, you’re in for a new adventure: calculating your income and Social Security taxes as a self-employed person.
The basic principle of paying freelance taxes is simple: You add up your income, deduct your expenses, and transfer the net profit or loss to Line 12, “Business income (or loss),” on Form 1040.
Unfortunately, what’s simple in principle can be complicated in practice. Here are a few guidelines to help you get started.
Tax Issues for Freelance Writers
Here are some tips and strategies for thinking about your taxes. There are special circumstances that apply to freelance writers and other independent professionals, so I will highlight what you need to know to prepare your taxes.
Blue Inkwell Taxes for the Freelance Writer (I love this website. Excellent information!)
I’ll keep researching the tax code for 2012 and post what I find here. If you have any helpful articles, post the link in comments.
And good luck with the receipt hunt. Check your car. I found lots of Medusa’s Muse receipts in mine.