As an accountant, one of the biggest mistakes I see my
clients make is in their record keeping. It simply isn't adequate when it comes
to tax time. Now I don't care if you keep your records on an elaborate program
like Quickbooks or just throw all your receipts in a drawer, as an author, you must take the time to keep detailed records
of your income and
expenses. Otherwise, you could
be missing out BIG when it comes to
tax time.
Let me give you an example. You go to Walmart to pick up
some cleaning supplies and buy your daughter a copy of the Catching Fire DVD
which just came out. You pass by the office supplies section and remember your
printer is almost out of ink and you need paper for the editing you're getting
ready to do on your latest book project. You actually end up buying three packages of paper ($5.99 each), a
box of red pens for corrections ($10.99), assorted highlighters for tracking
changes ($7.99) and three kinds of post-it notes ($12.99) for tabbing things
you want to come back to.
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You get home and without thinking about it, toss your
receipt in your to-be-shredded pile (because you used your debit card and you
don't want that info floating around). Guess what? You screwed up big-time
because you just spent $49.94 plus sales tax, and it was all tax deductible. Depending on how much writing you do, that can
really add up.
Here's another tip. The mileage for that little trip - it's
tax deductible, too. But if you don't keep a record of it, when it comes time
to take your tax stuff to H&R Block, you will have forgotten all about it.
(And the IRS requires that records are kept on a log of some sort, anyway.)
Over the next few weeks, I'll be giving simple tips to help
you get your finances organized and ready for tax time. If you've messed up and
didn't keep records for this past year, we'll get you on the right track for
2014. (Plus, I have a tip or two for you in case you did mess up.)
I know you didn't go into writing so you could spend all
your time stressing over your finances, but let's face it, you'll never be able
to measure your true success unless you keep up with what comes in and what
goes out.
My goal is to make that as simple and painless as possible
for you. Over the next few weeks, I'll be posting some very simple and easy to
follow tips about getting your finances in order.
Here are two simple tips to start with.
- Ø Find an envelope, a folder, or a box to start keeping your receipts in.
- Ø Keep a notebook in your car to start logging your writing related mileage (writing classes and groups, picking up supplies, meeting your writing mentor for coffee…)
Don't get stressed about it. I'm here to help.
Fran Veal has an accounting degree from Middle Tennessee State University with over 25 years of accounting and finance experience. She is a QuickBooks ProAdvisor and Certified Bookkeeper. Tax law is subject to change. Please go to www.irs.gov for current tax information or ask your local tax accountant.
