It's snowing here in Maine again!!!! Big surprise, I know. But we have 2 to 3 more feet of snow expected this week. The kids have already had 4 out of their 5 allotted snow days. At this point, they'll be going to school until July.
Annnnnyyyyyywwwwwayyyyyyy, it's that time of year again! Most really don't look forward to it, especially if they have to fill out a schedule C, but I actually kind of like it.
Now, I'm not saying that I'm an organized writer... far from it. But I do appreciate any activity that requires putting things neatly into boxes or sorting things out. Puzzles, love puzzles! Maybe that is why I enjoy being a bookkeeper. It's all about task orientated activities.
Okay, I've seen lots of questions going on in email lists that are geared toward taxes and much of what I see are very simple questions that get twisted around. If you are experiencing dizziness, anxiety, loss of sleep you may have a problem with doing your taxes. Or you are taking the wrong medication. Either way, if that is the case then please take them to a professional. And by professional I mean someone who has been doing them for a long period of time, has experience with creative business taxes and just plain gets it.
I am not the tax expert, but I have felt confident enough to do my taxes since becoming a writer. Judging on my income I may be a better tax preparer than a writer... but I kid. Sort of.
Some things I hear often hear are:
WRITING SPACE EXEMPTION: Do you need to have an office to claim the exemption? Yes, but not necessarily in the terms that you may think of when you call it an office. It needs to be a dedicated space. If you have a closet/turned office, but the rest of the room contains a bed for a guest room, you can claim the size of the closet (as long as you aren't storing clothes over your head while you use the office). Use the kitchen table? As long as you don't use it continually to eat dinner on you could claim that 4x6 foot space. Just keep in mind that claiming the office exemption is something the IRS will look at if your return is flagged. Best if you don't claim it if you don't have to...
USE OF CAR: Unless you have a vehicle that is used for business only you need to determine the amount of time it is used. More often than not, it's better to go with a mileage claim instead of determining the amount of usage of the vehicle. I would add that you should not overlook the opportunity to use your car as a promotional tool. It goes further toward claiming if you have a decal with your name and website on it. I did this for several years.
Also, keep a log of travel mileage including any trips to the library or day trips for research. If you have the documentation to claim it and it is a legitimate expense then you can feel comfortable claiming it.
TRIP EXPENSES: Despite what my husband would love to believe, a trip to pick up our daughter from college can not be claimed as a writing/trip expense unless it is solely for research. Also, any amount of hotel expenses have to be divided by those who roomed with you and that leads us to...
MEALS: Another one of those things that it just doesn't pay to cheat on. If I go to a conference then I can claim my meals. I keep receipts and keep track of tips added to bills. Keep a small envelope or folder with you when you travel and it will help to keep in place until you can log it. Also, keep in mind that the IRS will only let you claim 50% and there are stipulations on that. For more information: check out IRS Publication 463.
There is tons more, but I would encourage you to read the IRS publications involved with the Schedule C. Even if someone else is doing your taxes for you, you need to be sure to keep track of the right information to make their jobs easy.
I will most likely be posting on this again in the future. As always, a disclaimer pertains to my tax posts. I AM NOT A TAX EXPERT. MY INFORMATION DOES NOT CONSTITUTE THE ABSOLUTE FACTS. PLEASE CHECK WITH AN EXPERT FOR FURTHER INFORMATION.
Have a wonderous day!
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