We All Float Down Here, Georgie…
Budget vs. Whee Spend!
In my excitement about moving, I forgot to update.
I vaguely remember where I was going with the last post, but since nobody seems to care about plot holes (do we, Mr. Lucas?), I propose we move on to something far more substantial. All in favor? Good.
Hey, you there. Lower your hand.
Ahem. My apologies.
Part of making your living as a writer is paying taxes. Yeah, they still exist, and they’re far meaner and nastier than any normal schlub is used to. Not only do you need to keep track of your everyday expenses, you need to remember that unless you average a book advance every three months then there is no steady source of income. So your house payment, cell phone bill and internet is not going to wait around for you to receive that quarterly royalties check. And when it comes, you always want to spend it like it’s going out of style.
But wait… there weren’t any taxes taken out by the publisher. Why? I thought I was their employer?
Technically, no. You are a contracted individual (unless they pay you for editing and other busy work on a regular basis, and even then they still don’t tax your royalties for you) who works on a contracted basis with the publisher. A very smart writer who receives advances and royalties regularly puts upwards of 50% of his monies earned into the bank, simply to cover the taxes he or she will be paying at the end of the year.
There is a saving grace, however: tax write offs.
Many writers write-off their computers, since it is a legitimate business expense when writing. Unless they use a typewriter for their work. Some write off their printers, since they print out their contracts and whatnot. Some even write off their convention visits, simply because they sold a book or two at the con. It’s a business, and once the writer starts treating it as such, then the sky isn’t even a limit.
(Disclaimer: the author of this article is in no way a tax specialist. He does not know anything of tax codes, cannot be held accountable for any boneheaded move any reader makes here and does not have any legal authority on this matter. Hell, he doesn’t even have moral authority. He also is going to laugh in your face if you do not consult an accountant of any sort before doing any sort of tax paperwork involving your royalties. You have been warned.)