As I was emailing my accountant this week, it occurred to me that it is a good time to talk about taxes for writers. Today I offer a few tips to help you get started or to remind you of things to remember.
- Always get a receipt, keep them together so you don't lose them, make sure you've clearly marked the business receipts as “business,” and when meeting for a drink or a meal, write the name(s) of the people you met with and the reason for the meeting.
- If you mix business and personal when shopping or during a trip, like a conference, be sure to separate the elements that are personal from those that are business expenses.
- When purchasing books or other physical items for resale, find out if you need to have a sales tax license in your city/county/state/province/country. And if you get a sales tax license, you can get a reseller's certificate so that you don't have to pay sales tax on items you'll resell.
- When purchasing books or other physical items for resale, if you give any away as gifts (not review copies, but gifts) and you did not pay sales tax on them, you are responsible for paying the tax when you file your sales tax form.
- Put a note on your calendar – this year and next – about tax filing deadlines (income tax, sales tax, etc.). Add another note a month or two before as a reminder to get started on preparing the numbers.
- Save yourself time at tax filing time by choosing one day each week or each month to update all your income, expense, and tax information. Whether you use accounting software like Quicken, QuickBooks, Mind Your Own Business, etc., or a spreadsheet like Excel, or a notebook, write down all of these every month. It will make tax time so much quicker and easier for you!
I hope these tips are helpful! Good luck!