Thursday, April 16, 2009

Get a Head Start - Cheap & Easy Tax Tips for 2009 by Christine Duncan

Since this post will be published the day after April 15th, I thought I would write about taxes. It's too late now to give you any tips for your 2008 filing but not too late to make life easier next year. And it doesn't have to take you a lot of time, money or trouble this year. Here's the deal.

I work as a tax preparer for one of those places you see advertised way too much on T.V. and I'm a bookkeeper. So I see folks come in all tax season long with their own businesses who don't have a clue what they made or spent. And believe it or not, if you write and are published, you have your own business. All you have to do is make 400.00 from writing for the IRS to want to hear about it from you.

But hey, you say, I spent a lot of money on the writing too! I hear you. But the IRS will want you to be able to prove it. And it is easy and cheap enough. How cheap? How about under ten bucks, is that cheap enough for you?

First off, get one of those free bank accounts. It doesn't have to be a business bank account. You can get one from your credit union or some bank close to you. Run all of your income and expenses out of it. In other words, don't just deposit the royalty check from your publisher there, but also that 60.00 bucks you made from selling books in the back of the room when you spoke at the Senior Center. And use those checks (or debit card) to pay all of your writing expenses.

If you have to loan yourself money--deposit it into that account with a note in the register to remind you at year end. Then you have a record of all your expenses.

Already opened the bank account? Then go to one of your favorite office supply stores.Buy one of those vehicle expense books. They usually run around 2.00. Put it in the car on the center console. Every time you go somewhere for your writing, record your mileage. Make sure you record this trip to the office supply store and the bank. While you're in the store, buy yourself one of those nifty accordion folders with sections. You need a place to store your receipts, like the receipt you're about to get. You don't need a big filing cabinet for this. If you don't feel like using an accordion file, just use an old 10 x 12 manila envelope. (I told you this was cheap.) But label the sections: office supplies, computers & equipment, advertising (oh yes you do--you have a website don't you? How about the Romantic Times ad?) Make other sections as needed.

Put this folder in your car trunk in that box where you store your extra books in case the bookstore runs out when you do a signing. Then when you make a purchase and throw your stuff in the trunk, make sure the receipt goes straight into your accordion file. That's it. You don't need a big accounting program. You have just made sure that you have a record of income and expenses for the year.

At the year's end, total the receipts (or have the person who does your taxes do it, but that will cost you.) and total the deposits in the bank account. Voila! You are ready to file a schedule C without much effort or expense. And then filing your 2009 taxes will be easy. Yeah, right!

Christine Duncan
Safe Beginnings, A fire, a murder, a battered woman's nightmare
Safe House, Life--and death--in a battered women's shelter.
In print soon from Rule of Three--3 writers, 3 countries--3 ways of doing things


Morgan Mandel said...

Sounds like an easy and organized way to be ready for tax day next year.

Morgan Mandel

Dana Fredsti said...

Other than the separate bank account, I've done all of this for the last few years. I used to work for the IRS...(da dah dahhhh!) and learned to save EVERY thing and write everything down in a calendar and logbook. Makes it so much easier when tax time is here! And I keep a record of all my income from writing (including selling those books at libraries and signings!).

You speak words of steel, Christine! Everyone listen to her!

Jean Henry Mead said...

Great advice, Christine. Thank you! BTW, how many years can you safely claim more expenses than writing income without getting audited? :)

Ronald Carey said...


It's really good to see your blog about home office furniture.

Generally a vertical file cabinet has two to five drawers.

Space being an issue these days, vertical file cabinets seems to be a more popular choice since they cover less area.

Christine Duncan said...

The accepted principle is that you can take a loss 3 out of 5 years, Jean. But the real deal that separates a business from a hobby is the intent to make a profit.