It’s almost April, which means . . . taxes. If you haven’t done yours yet, you’re not alone. I gave up a day of writing to do mine yesterday, and the results were not good. I owe big-time, mostly due to money from sources other than my writing. But we’re all about writing here, so let’s talk about that.
In adding up my writing expenses, I was shocked to discovered that I had spent $610 on contest fees. Couldn’t be. I checked my numbers again. Yes, $610. I wrote about contests a few weeks ago and you can read that post by clicking here. Contests can be a great way to get discovered and win some money, but if you don’t win, all you get for your money is a completed manuscript and a copy of the journal sponsoring the contest. The fees have been steadily creeping up. A few are under $10, but most contest sponsors charge $15-$20 to enter one to three poems, a short story or an essay and $25 to $35 to enter a whole book. Some of the book contests I entered last year when I had a new book and was feeling flush charged $100. It’s like going to the casino, gambling that your twenty-dollar bet will win you a thousand bucks or more. It’s great if you win, but if you don’t, you might not have enough money to get home. Meanwhile, this is how the sponsors of the contests are paying their bills.
There are some free contests. Check http://www.freelancewriting.com/creative-writing-contests.php. And here’s a thought. Skip the contests and send your work in as a regular submission. Some journals are even charging for that now, $3 here, $5 there. Think twice about those. A successful magazine or newspaper should be able to make its money somewhere else besides charging its writers to submit their work.
As of now, I’ve decided to give my credit card a rest and avoid paying for contests. It’s up to you. I always tell people I don’t need to go to the casino to gamble; I’m a writer.
Meanwhile, if you haven’t done your taxes yet, don’t wait much longer. Remember, if you earned any money with your writing, you must declare it on your income tax forms, but you can offset it with your writing-related expenses. You are keeping track of what you spend, right? If not, start now. Write it down, keep the receipts and make it easy to fill out that Schedule C at tax time. And yes, contest fees are deductible. For a previous post on writers and taxes, click here.
As always, feel free to comment or ask questions.
Have you heard about Natalie Goldberg and her classic book Writing Down the Bones? If you haven’t read it, you should. Its stories and exercises will knock the blocks right out of your writing practice. So will her other books, like Old Friend from Far Away and Wild Mind. Meanwhile, she has a new book, The True Secret of Writing, coming soon. I heard her speak a couple years ago, and I was transformed. Visit her website at http://www.nataliegoldberg.com.
U.S. writers, our income tax deadline is only about two weeks away. If you have put it off, my previous posts on income tax may help you figure out how to handle the writing part of your tax forms. The key things you need to know: keep track of every penny you earn with your writing and every penny you spend. You are legally required to report your income, and your writing expenses are deductible. For advice, visit “Last Minute Tax Tips.”
You open the door and find an Easter basket on your front step. Except this basket contains something you would never expect the Easter Bunny to bring. What is it? Use your imagination to come up with a story or poem based on what’s in the basket, maybe what you wish was in the basket or what you’re afraid might be in the basket.
Now Go Write
The article (or short story or poem or essay) ran two months ago, and you haven’t gotten paid. Or, you were paid, but you’re disappointed in the amount. This is your sixth piece for them; shouldn’t you get a raise?
Well, dear writer, did you send the editor an invoice, a piece of paper stating what you have done for them and how much they owe you? Many publications don’t pay without an invoice for the editor to approve and send on to accounting. Publishing is a business, and so is writing. No invoice, no money, even if you have a written contract. So ask if you need to send an invoice, then do it. Email works, but so does a paper statement mailed with a self-addressed envelope for the check.
If you did send an invoice and still haven’t gotten paid, ask the editor, but don’t harass her. Except in the smallest publications, the editor has nothing to do with paying writers. Once she sends the invoice on to accounting, she doesn’t know anything about it. She’s in charge of words, not money.
Your invoice may have gotten lost. Call accounting. If they haven’t seen it, send another copy. If you still don’t get paid and months are passing by, feel free to complain, nag and threaten, politely at first, then irately. Worried about not getting another assignment? Do you want to write for a publication that doesn’t pay you? Organizations such as the National Writers Union or the American Society of Journalists and Authors have advocates who will help you get paid. Sometimes a note from one of these groups will get things moving.
As for your raise, have you asked for one? I discovered in my stint behind the desk that one writer was getting paid on acceptance and another was getting $200 per story despite the official policy that everyone was supposed to be paid $100 after publication. Why? Those writers insisted on better treatment. They had a record of good work for the magazine, they knew they were worth more, and they demanded it. And they got it. So ask. The worst they can do is say no.
A precaution: Many publications these days are living from check to check. They can’t pay you early or even on time because they don’t have the money. They’re already paying the printer and distributor with IOUs. If the magazine seems to be running fewer pages and payment is getting slower with each issue, watch out. They may be close to going out of business, and you don’t want to get stuck doing work that you never get paid for. It might be time to seek another market.
Disclaimer: I’m not an accountant; I’m a writer, but my husband used to be a professional tax man and he taught me a lot.
I hope this blog is coming after the fact for most readers. I hope you have finished your tax returns, sent them in and collected your refunds by now. But if you haven’t, or you weren’t too happy with the results, here are a few words of wisdom.
If you make money with your writing, you are supposed to report it on your tax return. If you make more than $600 from any one publisher, they will be reporting it to the IRS, so you need to report the income. If anybody pays you royalties, they will also be sending a form to the IRS. Even if you don’t make much money, you should list your income, not only because it’s the right thing to do, but to show that you’re seriously working at your writing and so you can deduct your expenses.
If you’re writing for publication, you can claim your writing expenses on Schedule C, the form for small businesses like yours and mine. The things you can claim include: office supplies, Internet connection fees, postage, travel for interviews, tuition for classes and workshops, publications you buy for your business, contest entry fees, and more.
To verify these expenses, you need to keep receipts and keep records, either on paper or on the computer, for every work-related expense and every work-related mile you drive. It doesn’t have to be complicated, and it doesn’t have to take a lot of time, but you need to do it.
Note that most accountant types are not writers and don’t really understand our financial situation, so we have to be ready with clear records, whether we do our own taxes or pay someone else.
People often wonder if they can still deduct writing expenses if they’re not making a profit. The answer is yes. Ideally you should make a profit within three years, but if you don’t and you can show that you are working hard at it, that you have a “profit motive,” you should be all right.
For more tax advice, read Bonnie Lee’s Tax Advice for Writers at the writersdigest.com site. You might also want to get the Writer’s Pocket Tax Guide. Updated every year, it’s available as an e-book, if you’re in a hurry.
Good luck. Get it done, so you can hurry back to writing.
>This year is almost over. That means it’s time to do some math. My husband used to be a licensed tax preparer, so I got used to him nagging me about my accounting. Now it’s my turn to nag you. If you have not been keeping track of your income and expenses for your writing business, resolve to start on Jan. 1. Not only are you legally obligated to report your income, but you can deduct most of your writing-related expenses on your tax return, offsetting other income you might have. Go to IRS.gov, look up Schedule C and start figuring out what you need to fill in the blanks. Even if you don’t make money, you can claim your freelance expenses as long as you can prove that you are making an effort to sell your work.
It doesn’t matter whether you do your accounting in an old-fashioned ledger book, in a computer program like Quicken or on a spreadsheet as long as you keep track of it somewhere. Deductible expenses include: office supplies, postage, Internet expenses, contest fees, long-distance phone calls, mileage, travel expenses if related to your writing, organization memberships, classes, books, newspapers, computers, cameras, and more. Trying to recreate these expenses at the end of the year is nearly impossible, but if you chart your expenses as you go, it will be easy to add them up.
Not only do good financial records help you with your tax return, but they give you a clear picture of how you did over the year in terms of marketing and making money. You can see what cost more than it was worth and what worked well. It’s a good New Year’s Day project.
New Year’s is also a good time to set goals. What steps do you need to take to get to where you want to be a year from now? Start taking those steps right away. That’s my plan. Will you join me?