Friday, May 28, 2010

Bookkeeping for Writers


Brigitte A. Thompson is author of eight financial books including the just released Bookkeeping Basics for Freelance Writers published by Crystal Press.

As writers, many of us may not think about the bookkeeping and financial side of our business. After all, we are creatives—we don’t have time to crunch numbers, and many of us don’t even like numbers.


This is an important point..."writing is a business." During interviews with other writers, the question I was asked the most revolved around this very concept. Most writers didn't really consider themselves to be in business. It's a disadvantage because income needs to be reported at tax time and without the expenses to offset the income, tax liability is greater.

Tell us what Bookkeeping Basics for Freelance Writers is about.

Writers have many important questions to ask about income and expenses, but no single source for answers. I created this book to be that source. It is an easy-to-understand guide to organizing a writer’s financial life.

This book addresses issues writers face daily, such as how to deduct travel expenses, determine taxable writing income, and claim home office deductions.

Have you found that writers require a different set of bookkeeping rules?

Many bookkeeping rules are universal, such as the requirement to record income, but there are some areas of the tax law that are of more interest to freelance writers. This includes dealing with royalty payments, bartering, personal property and agent fees.

What are some tax deductions that writers might not be aware of?

Some expenses are common, such as the cost of purchasing a case of paper or paying for a computer software upgrade. Other costs incurred in the operation of your writing business may not jump out at you as expenses when they could be. For example, mileage, meals, and shipping.

What are some of the most common accounting missteps and how can we avoid them?

Not taking yourself seriously as a business owner. The IRS considers you to be in business when you are actively pursuing projects intended to generate income and expenses. Keeping track of your income and expenses from day one will enable you to pay the least amount of income taxes on the money you earn.

Many people find numbers, especially when related to bookkeeping and taxes, intimidating.

My book breaks down complicated number crunching into easy-to-follow steps. Sometimes knowing the reasoning behind a task makes it easier to complete. Writers can take advantage of some wonderful tax deductions, but only when they are aware of the possibility and know how to accurately document the expenses.

What are some of the challenges writers face?

The most common challenge revolves around what they can claim as income and what counts as a tax deduction. For example, if their first job is writing the school newsletter, is the money received really income?
The second most common concern for the freelance writers is related to proper documentation. What receipts did they need to save? How should they be kept and what information needs to be recorded?
Why is it important for writers to understand bookkeeping?

Writers are earning money and this money needs to be reported as income on their tax return. If writers do not have any expenses to claim, their taxable income will be higher and they will owe more income tax.

Obviously, your book is a great place for writers to get information on bookkeeping. Are there are any other resources you recommend?

The IRS web site (http://www.irs.gov/) to research specific tax issues and the Small Business Administration (http://www.sbaonline.sba.gov/) for general business information.

I also recommend joining professional associations such as American Society of Journalists and Authors (http://www.asja.org/), The Authors Guild (http://www.authorsguild.org/) and National Writers Union (http://www.nwu.org/).

Freelance Success (http://www.freelancesuccess.com/) offers an insightful newsletter for their members. There are also online groups for writers such as MomWriters (http://www.momwriters.com/) offering networking opportunities as well as camaraderie.

Bookkeeping Basics for Freelance Writers is available through Amazon.com and Brigitte’s publisher (http://www.crystalpress.org/). Learn more at her website http://www.bookkeepingforwriters.com/ and her blog http://www.writersinbusiness.blogspot.com/
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A native Montanan, Heidi Thomas now lives in Northwest Washington. She has had her first novel published, Cowgirl Dreams, based on her grandmother. Heidi has a degree in journalism, a certificate in fiction writing and is a member of Northwest Independent Editors Guild. She teaches writing and edits, blogs, and is working on the next books in her “Dare to Dream” series. The sequel, Follow the Dream will be released this year.



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15 comments :

  1. Heidi,

    Thank you for the opportunity to be part of Blood-Red Pencil. You did a great job with the interview. I'm looking forward to working with you more through the Virtual Book Tour- Writers on the Move group.

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  2. Nice interview. Thanks for such an informative post, Heidi.

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  3. What a lot of thought and time you put into this. Most generous. Thank you, peace and all good,

    Diane

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  4. What a terrific resource this is. I have saved off all those links so I can utilize them later. Thanks Heidi and Brigitte.

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  5. Thank you Heidi and Brigitte. Definitely things writers need to learn. And it's so much easier to find out about now rather than on April 15th.

    Helen
    Straight From Hel

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  6. This comment has been removed by the author.

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  7. I despise working with numbers, so I stick everything in one spot and work on it at tax time.

    Morgan Mandel
    http://morganmandel.blogspot.com
    http://facebook.com/morgan.mandel

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  8. Thanks Heidi and Brigitte! I'm often asked tax questions when speaking to other authors. Now I have a book I can recommend.

    Charlotte

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  9. This is a most helpful post. And I have saved it for reference.
    I apologize for that post yesterday. I have no idea what happened!

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  10. Probably a useful book, but I'm afraid it would make me fall asleep. Most boring stuff I know is finance and law.

    I tried to read Das Kapital when I was in the late teens. That was really heavy stuff. Never got through it.

    Cold As Heaven

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  11. I appreciate your comments and want to assure you, the book is far from boring. :)

    Although the topic of recordkeeping can be dull, I have added side margin features with tips and questions from other writers to liven up the text.

    It's a practical guide to help writers with their finances. Give it a try... it's bound to save you money at tax time.

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  12. Writers are more creativity-centered than number-centered. But you need not do further research about bookkeeping. You just need to know where your money goes. You can also record them through different software. That way, you can keep track of your money easier.

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  13. You need not be critical when it comes to shouldering your income and other finances. You just have to keep track of the money. You can also use accounting tools if you find it hard to compute your finances.

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  14. Bookkeeping can be very intimidating because it involves a lot of technicalities like royalty payments and bartering. This book should help your readers understand these technical terms. I hope the book is still selling well as of now!

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  15. Yes, of course, if you’re writing for a living, you’re doing business. You might be dealing with words, but business always means numbers. And record keeping is important, no matter what nature of business you’re in. it’s actually a good thing that there are software that are less complicated to handle personal financial data.

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The Blood-Red Pencil is a blog focusing on editing and writing advice. Some of our contributors are editors, some are authors, and some are writing sheep. Yes, sheep.

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