All Taxes Eve

It's September 14. If you're self-employed in the U.S. - and if you're a freelance writer, you're self-employed even if you also have a day job or two - third-quarter taxes are due tomorrow. I tend to forget these things, but fortunately Damon remembered and I did the math and wrote the check yesterday.

This is the kind of thing writing classes ought to cover. After all, you can stick your own butt in the chair every day and check writing teachers out of the library - Dickens! Shakespeare! Diana Wynne Jones! Carolyn Keene! - and learn from the best and the worst, on your own time, at your own pace, any time you feel like it. It's fun, it's cheap, it just takes a little discipline. Keeping the ledger, paying the taxes, networking, promotion - those are the hard parts, and classes are hard to find.

The last time I didn't do quarterly taxes was, um, twenty years ago. I was charged a late fee even though the annual taxes were submitted on time. Laws keep changing, but I bet the government still wants you to pay as you go. Since then I note down everything I make through writing - not just advances and royalties, but appearance fees, any books I sell direct to the public, any penny related to writing - and stick it all in savings. Yes, savings, because day jobs are for covering bills. Writing income is special and unreliable. Come tax time I total the earnings, divide them by three, and use the vouchers and envelopes provided by the IRS to send one-third of my earnings for that quarter, extracted from savings for that purpose, to pay for democracy. I will never be in a 33% tax bracket, but charging this exorbitant rate cushions me from the effects of any large year-end windfalls that might arise, late fees arising from my losing track of the calendar, or other surprises.

If my income includes book sales, I should also fill out forms and write checks for sales tax; but normally my direct book sales are so trivial I only fill out the annual form, and under Texas law this is fine, as along as I remember to fill out the form once a year even if I owe no taxes. I hate filling out sales tax forms because I have to figure the actual percentage and keep track of whether I sold the books here or in Austin or where ever. This, by the way, is why authors need those math classes. It's too late for me, but if you're a teen-ager with authorial ambitions blowing off math, take warning. If you take nothing else away from high school, learn how to figure sales tax!

Authors in other states will have different sales tax requirements and state income tax to worry about; authors in other countries will have to deal with their own tax laws. But the basic requirements are the same everywhere:
1. Keep track of income
2. Keep track of expenses
3. Get professional help. I'm serious! Accountants are paid to keep up with the tax codes and forms. You're not. They know about things like late fees and deducting mileage when you drive to the library (but I can't deduct bus fare; how much sense does that make?) and what disqualifies you from using the guest bedroom where your write as a home office deduction. You can pay their fee out of the refund you get for overpaying on quarterly taxes.
4. Get your paperwork in on time.
5. Don't lose the vouchers. I keep mine in the back of the accordion file where I put the receipts.

Then put your butt back in the chair and get back to writing, as without work in hand you won't earn anything. But start tracking your expenses now, even if you've never sold a penny. You can claim the business as a loss on your annual income taxes, as long as you can demonstrate a good-faith effort to sell your work. And you need to develop good business habits well before you start to need them.