Getting a heads up on taxes by Christine Duncan

http://www.amazon.com/Safe-House-Christine-Duncan/dp/1936127008/ref=sr_1_2?ie=UTF8&s=books&qid=1257712524&sr=8-2 Since I am getting ready for the tax season, I thought I’d repeat this post I used on my other blog. Believe it or not, now is a good time for you to get ready for taxes for 2010.

I work as a tax preparer for one of those places you see advertised way too much on T.V. and I’m a bookkeeper. So I see folks come in all tax season long with their own businesses who don’t have a clue what they made or spent. And believe it or not, if you write and are published, you have your own business. All you have to do is make 400.00 from writing for the IRS to want to hear about it from you.

But hey, you say, I spent a lot of money on the writing too! I hear you. But the IRS will want you to be able to prove it. And it is easy and cheap enough. How cheap? How about under ten bucks, is that cheap enough for you?

First off, get one of those free bank accounts.It doesn’t have to be a business bank account. You can get one from your credit union or some bank close to you. Run all of your income and expenses out of it. In other words, don’t just deposit the royalty check from your publisher there, but also that 60.00 bucks you made from selling books in the back of the room when you spoke at the Senior Center. And use those checks (or debit card) to pay all of your writing expenses.

If you have to loan yourself money–deposit it into that account with a note in the register to remind you at year end. Then you have a record of all your expenses.

Already opened the bank account? Then go to one of your favorite office supply stores.Buy one of those vehicle expense books. They usually run around 2.00. Put it in the car on the center console. Every time you go somewhere for your writing, record your mileage. Make sure you record this trip to the office supply store and the bank. While you’re in the store, buy yourself one of those nifty accordion folders with sections. You need a place to store your receipts, like the receipt you’re about to get. You don’t need a big filing cabinet for this. If you don’t feel like using an accordion file, just use an old 10 x 12 manila envelope. (I told you this was cheap.) But label the sections: office supplies, computers & equipment, advertising (oh yes you do–you have a website don’t you? How about the Romantic Times ad?) Make other sections as needed.

Put this folder in your car trunk in that box where you store your extra books in case the bookstore runs out when you do a signing. Then when you make a purchase and throw your stuff in the trunk, make sure the receipt goes straight into your accordion file. That’s it. You don’t need a big accounting program. You have just made sure that you have a record of income and expenses for the year.

At the year’s end, total the receipts (or have the person who does your taxes do it, but that will cost you.) and total the deposits in the bank account. Voila! You are ready to file a schedule C without much effort or expense. And then filing your 2010 taxes will be easy. Yeah, right!

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One response to “Getting a heads up on taxes by Christine Duncan

  1. Pingback: Tweets that mention Getting a heads up on taxes by Christine Duncan « Rule of Three -- Topsy.com

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