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Discussion Starter · #1 ·
Uhg. Dare I even tell you what I'm going to owe in taxes? It's insane!

You'd think america would be more supportive of budding entrepreneurs! I need write offs!

It's a shame that I have to go from a fun loving author to the grueling grind of a record keeping accountant. But if I want to save any money I need to keep better records. What do you use to keep records? Do you have any suggestions for keeping good records of costs? (covers, advertising, editing, etc.) I'm terrible at organizing, and I need suggestions with April right around the corner.

  Someone please help me  :'(
 

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If you haven't done it already, become an S corp. That saved me thousands in 2014, and I only became an S corp in October. It's a bit of a pain, as far as paperwork goes. You have to file something every time you turn around. But I use LegalZoom, and they contact me whenever something is due.

As far as record-keeping goes, I just use a spreadsheet for income and expenses. I also have YNAB (You Need A Budget) software, but I'm awful at actually inputting my daily expenses. I need to get better at that.

Good luck!
 

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Discussion Starter · #6 ·
Rick Gualtieri said:
Sounds like you need the same thing I do: a good accountant.
You can say that again! But I might opt for a tax attorney as well to get the nuts and bolts together. Until then I need ideas for organizing. :(
 

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But if you can't afford an accountant, why not try a good self-employed book-keeper and dump all your bills/ bank statements etc, on him/her for a month at a time? At least, that way, you'd keep your costs down and have everything in order for the taxman.

Or you could use excel and do it yourself.

Getting insane demands from the taxman for your (high) earnings is something we should all have to suffer. :D
 

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Discussion Starter · #8 ·
anniejocoby said:
If you haven't done it already, become an S corp. That saved me thousands in 2014, and I only became an S corp in October. It's a bit of a pain, as far as paperwork goes. You have to file something every time you turn around. But I use LegalZoom, and they contact me whenever something is due.

As far as record-keeping goes, I just use a spreadsheet for income and expenses. I also have YNAB (You Need A Budget) software, but I'm awful at actually inputting my daily expenses. I need to get better at that.

Good luck!
Corporations certainly have their benefits. Do you think I could write off a trip to hawaii for "research" on my next novel? :D
 

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First off congrats on owing taxes.  Secondly,  find a good accountant (which by the way is a business expense and can be deducted next year).  Third, take all receipts and any PayPal stuff to said accountant.
Glad you are having really good sales.
 

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MikeDavidson said:
Corporations certainly have their benefits. Do you think I could write off a trip to hawaii for "research" on my next novel? :D
:) Actually, you can, if you're writing about the state and you need to do research. My accountant told me, though, that you have to keep a detailed log on where you go each day, so you can show how it fits into what you're writing about. So, if I go to New York City for "research" and I visit the Empire State Building, yet I don't actually write about the Empire State Building, then I can't use that time as a write-off. It's complicated, for sure.

Sorry for the long explanation. I knew that you were joking, but there are times when we can use trips as a write-off.
 

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Discussion Starter · #11 ·
hardnutt said:
But if you can't afford an accountant, why not try a good self-employed book-keeper and dump all your bills/ bank statements etc, on him/her for a month at a time? At least, that way, you'd keep your costs down and have everything in order for the taxman.

Or you could use excel and do it yourself.

Getting insane demands from the taxman for your (high) earnings is something we should all have to suffer. :D
Good idea. I could hire a part-time freelance personal assistant.

This is the only suffering I think I'm willing to do :)
 

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Discussion Starter · #13 ·
anniejocoby said:
:) Actually, you can, if you're writing about the state and you need to do research. My accountant told me, though, that you have to keep a detailed log on where you go each day, so you can show how it fits into what you're writing about. So, if I go to New York City for "research" and I visit the Empire State Building, yet I don't actually write about the Empire State Building, then I can't use that time as a write-off. It's complicated, for sure.

Sorry for the long explanation. I knew that you were joking, but there are times when we can use trips as a write-off.
Joke or not, it is actually a good idea that I'm taking not of now.. Makes you wonder if Dan Brown traveled to the vatican (inferno) for that reason.
 

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Discussion Starter · #14 ·
cinisajoy said:
First off congrats on owing taxes. Secondly, find a good accountant (which by the way is a business expense and can be deducted next year). Third, take all receipts and any PayPal stuff to said accountant.
Glad you are having really good sales.
Yes... I have a long log of expenses on Paypal to wade through. :(
 

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Actually, yes you can write off a trip... For research, as long as you can back it up with a book set in that location!

I'm lazy throughout the year, so every time I pay for anything book, marketing, office-related, I print a receipt if I don't already have one and drop it into a folder. At the end of the year, I plug them into an expense speeadsheet in Excel. Takes about an hour. Then hand it to the accountant, with my 1099's.

Done!

P.S. You can write off a percentage of your utilities based on the square footage of your house vs. Office too. And a percentage of your phone. And one kindle, one tablet, and one PC or Mac per year. One printer. All office supplies, postage for mailing books, stock art you might use for covers or advertising (banners on social media), etc...
 

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MikeDavidson said:
Joke or not, it is actually a good idea that I'm taking not of now.. Makes you wonder if Dan Brown traveled to the vatican (inferno) for that reason.
Yeah...I considered taking a trip to London and attempt to write off a portion of it if I set one of my books there. Never got around to it, though, but it's a good idea and a good way to creatively reduce your taxes while having fun.
 

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My accountant mentioned writing off a research trip too.

She gave me a terrific booklet on what self-employed folks are allowed to write off.  There are a *lot* of items that would never have occurred to me, so it's worthwhile to do a little investigating!

As far as the self-employment taxes go -- much of it goes into the Social Security kitty, so I keep telling myself, "You'll get it back in a couple of years."  That helps soothe the pain.
 

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If you use a separate checking and savings account for business and get in the habit of buying and selling only business related stuff through the business checking account, your bank statement is your P&L statement. However, every entry on it has to have a corresponding physical receipt. Create a file in your email for Receipts and save every electronic receipt to it. You can print them out quarterly when you file your estimated taxes and keep them and any other physical copies all together in a filing cabinet with that quarterly estimate payment.

When I get the KDP statement, I open it and create a new last column, using that days exchange rate to tally all sales then total them in my own currency at the bottom. That's labeled Gross Income. The next cell below that, I multiply gross by .3 and label it Taxes. I'm usually around a 30% rate after deductions, donations and expenses. When the royalties come in, I transfer the amount indicated for Taxes to my Business Savings account. Nothing else goes in or comes out of there. EVER! When I file my quarterly estimate, I pay whatever is in the Business Savings account and it's done for three more months.

I'm not a tax professional and my methods are simple and work for me. You should consult a tax pro on what is best for you.
 

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I pay quarterly, and while it's annoying, it's also a life saver. Not only do you not have to pay a penalty, but breaking up big payments is much easier than one lump sum. Still, the fact that I will have to write a $31,000 check in about a month for the first quarter is a bitter pill to swallow. Think of all the shoes I could buy (sigh).
 

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Yes, we had to go out and get a good accountant. She's awesome. And the S-Corp filing is next on the list after we get our move out of the way. (It's always something....)
 
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