Okay, I admit it, I despise tax season. It's the time of year that I do the most procrastinating. I find every excuse imaginable to keep from pulling out a year's worth of receipts, sit down and get all the little papers organized in their individual stacks, ready to take to the accountant. I'd use one of the new tax programs, but I'm so paranoid that I'm afraid 'Big Brother' will reach through my computer, put me in the audit interrogation room and then sentence me to forever wander through a maze of papers, never to find my way out again.
If you're like me, you're probably beside yourself wondering what you can deduct against your writing income. What does the Internal Revenue Service allow? What deductions send up a red flag, and will you be audited?
Every year, I depend on my trusty tax accountant to make sure I don't put a huge scowl on the IRS face. I'm no tax expert, but beyond travel, meals, and home office, postage, membership, etc. here are a few things I've learned along the way:
1. Keep business records, either on an accounting software program or on spreadsheets.
2. Maintain a separate checking account for transactions related to writing. (This not only proves business intent, but will make it easier to track income and expenses.)
3. Attend classes and conferences to improve your skills. (save those receipts)
4. Advertise, network, and keep a journal of these activities. (I use a spiral-bound desk calendar)
5. If you plan to deduct vehicle expenses, keep a mileage log.
6. If you bundle with a cable service (telephone, cable and internet), ask your provider to send you a cost break-down so you'll know how the exact amount of your monthly business related internet/phone service.
This is, of course, a mere puddle in a very complex subject. Unless you are a tax pro, be safe and consult a tax expert. April 15th is looming.