Monday, June 2, 2014

MAKING BUSINESS & TAXES EASY FOR AUTHORS II





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Published and not-yet-published writers who are writing for profit are engaged in operating a business, regardless of whether there is a profit or loss. All writers, therefore, must keep business records day-to-day to avoid absolute panic on April 15th. NOW is a good time to get ready for April, 2015. My post last month was about general business and taxes for writers HERE. The day-to-day paperwork of operating a business is this month’s topic.

Working a regular day job that pays a salary makes filing taxes easy—the dollar amounts in the little boxes of the W-2 are recorded in the corresponding little boxes on the 1040 or into Turbo Tax (my preference). Small businesses, especially ones that claim home offices (I don’t), must maintain the records to back up the info on the Schedule C.

Last month’s post includes an Excel worksheet file to automatically track income and loss to complete a business’s Schedule C – Profit or Loss for Business. The business owner (the author) must maintain records (both income and expenses) to back up the information on the Schedule C.

My filing system is super simple. Everything for the year—income and expenses—fits nicely in a small binder. On top of everything, there’s a Summary of Royalty Statements by Publisher. (Sample HERE) that’s a double check on the spreadsheet Behind the summary are labeled dividers for each publisher. A manila envelope that is three-hole punched sits behind them. As each royalty
statement/report arrives or is printed either quarterly or monthly, I add it to my Excel spreadsheet, add amounts to the income summary sheet in the binder, make a check mark on the report so that I know it has been recorded, then place it in the publisher’s section. As expenditures are made (of any sort—including utility and housing receipts if you’re claiming a home office), I record them in the spreadsheet, mark it, then add it to the envelope.

If the records are maintained regularly, at the end of each quarter the writer can easily determine if he/she needs to pay estimated taxes (The spreadsheet does all the calculations). At the end of the year, the worksheet contains all the information needed to complete the Schedule C – Profit or Loss for Business. All of the statements and a copy of the Excel Profit/Loss Summary can be added to the manila envelope and stored with the tax forms or retained in the binder for reference.


Next month, Setting up a Marketing Book for Authors.
 
  
Visit Rita Bay at Rita Bay's Webpage & Blog
 
"Duchess in Waiting" Siren BookStrand, March, 2014
"Ely's Epiphany" Secret Cravings Publishing, December, 2013
"Search & Rescue" Secret Cravings Publishing, July, 2013
"Finding Eve" Champagne Books, September, 2013
"Nimue's Daughter," Shared Whispers, Champagne Books, September, 2013
"Her Teddy Bare" Carnal Passions, May, 2013
"The Aegis" Champagne Books, April, 2013

"Into the Lyons' Den" Champagne Books, August, 2012
"His Desire" Siren BookStrand, May, 2012
"His Obsession" Siren BookStrand, April, 2012






4 comments:

Julie Eberhart Painter said...

Very helpful. If I ever make any money, I'll use it.

As of now, the Govt. owes me for my efforts and deductions that could land me in the funniest audit on record.

Liz Fountain said...

Thanks for the great advice, Rita!

Liz

Big Mike said...

Thanks Rita. Very informative, and I do the same thing, ref the spreadsheet kept up to date through the year.

Michael Davis (Davisstories.com)
Author of the Year (2008 and 2009)
Award of Excellence (2012)

Rita Bay said...

Thanks so much for stopping by. Many published authors have a wait before there's a profit after all the deductions are taken. Fortunately, a business loss offsets income at the regular job. Rita