By Moira K. Wiley
Keywords: writing expense, income, receipts
Most writers consider themselves right brain people. They utilize their creativity to spin fantastic tales, but ask them what their writing expenses were last month and they're at a loss. Unfortunately, to have a successful freelance writing career, there are certain aspects you must handle that you feel are unsavory or are outside of your comfort zone such as tracking income and expenses for both tax purposes and to ensure you're earning enough to survive in your chosen career.
Track Writing Income
Separate your business income from your personal income. If you simply put all the money you make through writing into your bank account with any other money you and other household members earn, you will have a harder time tracking the writing income you should report to the IRS. You will also have a difficult time knowing if your freelance writing career is profitable. This isn't to say you can't pay bills with this money; just make sure you track what you make and how it's spent.
The best way to accomplish this task is to open a separate checking account. You can tag this account "Writing Account" or look even more professional by giving yourself a business name to use on your checks. Put any monies earned strictly from writing into this account.
You can also use your bank account for checks and balances when comparing what you were paid compared to the invoices you need to create for each project. Some publications require you to send an invoice, but even if they don't, create one and keep it for your records so you can refer to the agreed-upon terms for each assignment. Billing software will help greatly in this area by making this task easier for you.
Keep Expense Records
Whether you keep receipts in a shoebox or a fancy filing cabinet, you must hold on to any receipts related to your writing business. These writing expenses will come in very handy when the taxman has his hand out at the end of the year and you need something to offset your earnings.
You should mark at the top of each receipt what kind of writing expense it is, such as office supplies, entertainment expenses, professional subscriptions or standard utilities. If you want to save time separating these later, keep a separate file (or shoebox) for each type of writing expense. You can also create a spreadsheet to keep a running total of each of these expenses and print out the totals for quarterly or end-of-year taxes.
Write Down Mileage
Mileage is one of the biggest deductions you have at tax time. Anytime you go to a writers' conference, go on a writing assignment, have lunch with your editor across town or just pop over to the local office supply store for some more paper or ink, keep a log of the miles you travel on each trip. To make this job simpler, keep a small spiral notebook or logbook in your car so you won't forget to write your beginning and ending mileage or use a tripometer for added ease.
Tracking your finances doesn't have to overtake the time you'd rather spend doing what you truly love - writing. By spending a little time each day on financial tasks, you'll save yourself a ton of work, many headaches, and a great deal of wasted time.
Moira K. Wiley has been a freelance writer and editor since 1999. She has 400-plus published articles to her credit appearing in various magazines, trade journals, newspapers and online publications. Mostly writing nonfiction, she also enjoys writing poetry and short stories and had both included in the cozy crime anthology, Almostly Murder.with pets published by Padlock Mystery Press. She's a former president of Oklahoma Writers' Federation, Inc. and currently resides in Stillwater with her big, lovable pit bull, Achilles.
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