By Jessica Freeburg
When I was first asked to write on this topic, I laughed-out-loud. Literally. 2015 was my first year of making a substantial income as a writer. I’d made little bits before that, but never enough to have an impact on our taxes.
I was shocked by the effect my income had on our tax return (or lack thereof). In fact, we found ourselves paying Uncle Sam, which filled me with a weird mixture of pride and sadness. It was like the government was high fiving me for finally making it as an author, then punching me in the gut and stealing my lunch money (or in this case, my Disneyland money).
But understanding the reality of taxes as an author isn’t so terribly difficult. Sure, I hate numbers, and thinking about percentages makes my brain ache. I won’t pretend to understand all the deductions and rules. So if you’re looking for detailed information about what you can and cannot deduct, stop reading now. My goal is to help you prepare yourself so you can easily hand your bundle of receipts and spreadsheets off to someone who digs bundles of receipts and spreadsheets.
The truth is, taxes don’t have to involve hours of sitting on your living room floor with a pile of receipts and last year’s calendar spread out around you while you rack your brain trying to recall how many miles you put on your car hunting down primary source material on Bigfoot sightings (or butterflies or daisies…whatever you might be writing about). If we can plan ahead, just a little, it will make compiling tax information at the end of each year, much less painful.
So here are my 5 simple tips to help reduce the pain of taxes:
- Save receipts. I’m sure this goes without saying, but it’s easy to forget. Keep an envelope in a location you’re likely to toss them into quickly. I keep a smaller envelop in my laptop bag, one in my car, and a larger manila envelope at my desk. That last one is like the containment unit in the basement of Ghostbuster’s headquarters – empty the small traps (envelopes) into that larger one regularly. And save receipts for anything related to your writing. If you fast forward to tip number 5 (“Find a good accountant…”), they might be able to deduct some things you didn’t think you could deduct – supplies you use for your work, cab and airfare, hotel, food, ghost hunting fees, Bigfoot costumes (those last two probably only apply to me, but you probably have some other more “normal” way you research or promote your work).
- Track mileage: If you’re old school, you can keep a notebook in your car. But there are some handy apps out there designed to track miles for you (check out Mile IQ or MileCatcher). Each mile is worth around $0.54, so every mile counts. I think of it this way, if two miles equals one full-sized Snickers and six miles equals a bag of Cheetos, every trip to my local library for research funds my nightly writing fuel. Hmm…this little math equation explains why I gain five pounds with every book I write.
- Save 25-30% of your income. Okay, there’s no way around the fact that doing this one sucks, but do it! If you don’t, you might find yourself staring at a bill from the IRS that sends you rummaging through your house for things you can sell on eBay (clothes you only sorta like, the treadmill in the basement you only use twice a year, your daughter’s American Girl doll collection, a kidney…).
- Make a spreadsheet to keep all this information in one place. Just take 10 minutes once a week to plug your numbers in. Your accountant (tip #5) will thank you.
- Find a good accountant who understands the ins and outs of taxes for creative professionals. Look, numbers are not always a creatively inclined person’s friend. Sure there are those of us blessed with an abundance of function in both sides of our brains, but if you’re like me, and the number side freezes up when your 10-year-old asks for help with their math homework, don’t even attempt to do your own taxes. Hand that job off to someone who understands and probably even likes crunching numbers.
Doing all these things doesn’t take much time, although it might take time to create the habit of doing them. But I promise, if you implement these 5 simple tips, you probably won’t break out in a cold sweat when tax-time rolls around next year. Unless you like cold-sweats, in which case, I recommend engaging in some sort of meat-eating challenge, like eating a 5-pound burger in 30 minutes. Meat-sweats are way more fun than tax-sweats.
Now, go write something brilliant, and sell it (but don’t forget to do #3).
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Jessica Freeburg has always been inquisitive and loves all of the challenges that life—and the afterlife—have to offer. Her fascination with history and with the paranormal fuels many of her creative works. As the founder of Ghost Stories Ink, Jessica has performed paranormal investigations at a variety of reportedly haunted locations.
She has written young adult fiction, middle-grade narrative non-fiction and short stories for children and adults. She has served as a news correspondent for the wildly popular paranormal radio show Darkness Radio and on the editorial staff of FATE Magazine. She is the Assistant Regional Advisor for the Society of Children’s Book Writers and Illustrators in Minnesota.
In addition to writing books, Jessica enjoys working in screenwriting and documentary production. She lives in Minnesota with her husband and three children. For more about Jessica and her books, visit JessicaFreeburg.com
