‘Tis The Season To Do Taxes

“This is too difficult for a mathematician. It takes a philosopher.”
— Albert Einstein, on filing tax returns

In Issue #156

‘Tis The Season To Do Taxes
by Monica Day

I’m living some version of the movie Groundhog Day when it comes to taxes. Except instead of re-living a day, I’m reliving an entire year – 2005 to be exact – over and over and over, until I get it right.

That just so happens to be the year that I broke the six-figure mark for the first time. And it didn’t go unnoticed by the IRS. Of course they are telling me it’s a “random audit.” Are you buying it? Yeah, me neither.

As someone who hates bureaucracy, this is my idea of hell. But I am taking some comfort in the fact that it’s going well so far. While there are certainly things I wish I would have done better back then, so my life would be easier now…it could be much, much worse.

Today, I am tackling the final hurdle – and it’s the biggest for me. Justifying the travel, meals and expenses I incurred that year. And they want to know everything – who I ate with, what we discussed, and how it relates to my business. They want to ensure there was absolutely no pleasure derived from the situation! Or that write-off is out.

It’s all so ridiculous to me. My entire life feels like a combination of business and pleasure. Or I wouldn’t do what I do. I think we should all aspire to a certain seamlessness between the personal and business compartments of our lives.

When I traveled to conferences, I brought my kids and a sitter whenever possible to minimize the amount of time I spent away from them during a very busy year. When I dined with clients, we talked about our personal lives in equal amounts to business. The line between client or colleague and friend is soft and mutable in my world.

This is how business…and life…really works. Or at least, it should.

But I didn’t sense an opening with my IRS agent to examine these and other deeper quality of life issues. So, I’m going back and re-constructing 2005 to her satisfaction, trying to hang on to my deductions for dear life. And resolving with every dip into the past, to be as crisp and clean in my record-keeping in the present.

There are more tax advantages to being self-employed than most people realize. Literally dozens of little ways to arrange your affairs and track your business that can add up to thousands of dollars in savings. You just have to know what they are, and handle the paper that proves them properly. And not let your righteous indignation about how wrong the system is, how much you hate it, and whatever other objections keep you from following the rules.

Believe me, I can completely sympathize with you. Maybe your IRS agent will, too. But at the end of the day, it is what it is. And we’ve all agreed to play the game of living here, being citizens, and paying the price.

So suck it up and do it right.

One last thing – don’t hide behind the idea that you are just a beginner and tax issues don’t apply to you yet. If you’re just starting out, all the more reason to take my advice. When your income shoots up rapidly, and odds are it will if you really make a run at copywriting, a red flag is likely to go up in a federal building near you…and a letter will come in the mail that makes your stomach drop to the floor.

It doesn’t have to catch you off guard. You can make money, keep a good chunk of it for yourself, and sleep easy at night if you take just a few minutes each day to get it right the first time.   

Resource Referral: How to Save Money in Taxes This Year… and Every Year

As a freelance writer, nothing beats the feeling of walking out to your mailbox and discovering a long-awaited check among the usual bills. Whether it’s for $75 or $10,000, it’s always a high to open it up, see your name, and know your hard work is being rewarded.

Then reality hits…

“Oh yeah,” you think, “I’ve got to give the government their share too.” As much as 50% in some cases…and suddenly your check doesn’t seem so big anymore.

If only you could keep a little more of your hard-earned money for yourself…

Well you can. In fact, A LOT more of every check you earn can go into your pocket instead of going to the IRS. How? Simply by taking advantage of certain tax provisions, which might as well have been created for writers…

They can save you literally tens of thousands of dollars, if you know how to:

It pays to know. Pick up your copy today of The Writer’s Tax Guide and find out how much you could save this year on your taxes…well in advance of the April 15th deadline! Read More…

Quick Tax Tip: More Than Just Saving Receipts

I am the queen of saving receipts. So much so that my KIDS remind me to ask for them at toll booths. Which is quite hysterical considering they are 6 and 9 years old, respectively.

Where I fall down, however, is making notes on the receipts immediately, so I remember the business rationale behind the expense. As I am pulling my hair out trying to recreate my life in 2005, I feel the urge to tell you…do as I say, not as I do.

Every single day, gather your receipts out of your wallet or purse, and make a quick note on them. Include the reason for the expense, who might have been with you, why you are taking that trip, how it relates to business, etc. Should the IRS come knocking, you’ll be grateful you took the extra time and effort now.