Bookkeeping for Writers by Brigitte Thompson

Writers work in all different genres and write for a variety of media outlets. Some of us are business writers, others create romance novels and many write articles for magazines or copy for web sites. Putting words into print is our profession, but dealing with the financial aspects of our writing business can be challenging.

As an accountant, author and freelance writer, I can help. My newest title, Bookkeeping Basics for Freelance Writers, addresses issues writers face daily such as how to deduct travel expenses, differentiate between personal and business property and claim home office deductions.

Bookkeeping is an essential part of the business of writing, especially identifying and tracking expenses. Business expenses are considered an operating cost. The more legitimate business expenses that we can document, the lower our tax payments will be.

Understanding Expenses

The Internal Revenue Service (IRS) requires that our writing expenses be ordinary and necessary in order for them to be acceptable. An ordinary expense is defined as common and accepted in our profession. A necessary expense means we need to spend this money in order to operate the business. The expenses must not be considered extravagant. They must be an essential part of doing business as a writer. It is important to differentiate between personal expenses and business expenses.

Writers are able to realize some unique deductions which may be considered personal for most other taxpayers. For example, a book on the history of California used for researching my fiction manuscript based in that state could be deductible as a writer. Other potentially deductible expenses include tickets to a ballet used to build the character of a ballerina I am writing about and an instructional DVD used to improve my public speaking skills. Most writers will call these expenses research or professional development. We need to be able to justify each expense if audited, so be sure it is legitimate and has the supporting documents to back up the claim.

Recordkeeping Options

To justify expenses, it is important to establish a system of recordkeeping that works for you. Some things need to be recorded daily, while others can be done weekly or monthly. It is imperative that you get into the habit of saving and recording everything related to your writing business. All invoices, receipts, credit card slips and bank statements are essential documentation that should be kept.

Some people find it helpful to create a system for their financial transactions using envelopes and lined paper. Transactions can be recorded on sheets of 8 ½” by 11” paper attached to the front of a large clasp envelope with supporting documentation stored inside. This system works well for many writers because it is simple to set up and only requires the purchase of paper and envelopes. However, one disadvantage of this system is that it’s hard to see at a glance how much you have spent on supplies during the year or how much you have paid for your business phone line.

If you prefer computerized bookkeeping, these transactions could be recorded on a spreadsheet and receipts could still be kept in a clasp envelope. Microsoft Excel® provides an easy-to-use program which can help organize your records. One benefit of tracking this information with a computer spreadsheet is its ability to compute. Once you learn the program, you will be able to format columns to add a range of numbers. This eliminates the chance of addition errors haunting you during an audit. Unfortunately, spreadsheets do not offer much room for detail and are not able to generate financial statements.

If you would like to go a step further, QuickBooks® is a user-friendly accounting program which generates financial statements and budgets using the data you input. Again, entering the data allows for error free calculations and, as a bonus, custom reports compile the information so you can easily determine how much was spent on shipping manuscripts during the year, for example. Trial versions of accounting software can be found online, but the cost to purchase and the time spent learning it could be a disadvantage to some writers. Receipts would still have to be kept to document your deduction.

The choice is yours. Any system that works for you is acceptable to the IRS, as long as the pertinent information is retained. Learning what to record as writing expenses as well as how to properly document each transaction is important to the success of your writing business.

Please visit my web site for more information: Bookkeeping for Writers .

Carma Haley Shoemaker, Writer

Coming to us from Mansfield, Ohio, Carma Haley Shoemaker is our featured writer this week. Shoemaker is the author of "A Cut Above," "Marriage vs Parenthood," "A Woman Alone," as well as hundreds of other articles, essays and poems in print and online. She is also the Senior Administrator & Moderator at Momwriters.com, one of the oldest and largest online writing communities.
- You have been quoted saying you “can’t remember a time” when you didn’t write. Can you tell us about your first written piece? How old were you?

My first written piece was a poem I had written for my eighth grade English class. I was maybe 12 or 13 years old at the time. I had written many, many things before this, but nothing that I had shared with anyone. The assignment was to collect poems that "touched us, reached out to us, or stated something we felt or believed." The teacher stated if we couldn't find all the required poems we could write one or two of our own to include. Of course, I wrote and included two of my own even though I found all those required for the assignment.

After getting my graded assignment back, the teacher asked me if I would allow him to enter one of my poems into a contest for young poets. I don't even think I let him tell me everything about the contest before screaming out my answer! "Yes!! Enter it!" While I didn't win, I felt at that moment that if my teacher thought that I was good enough to enter a contest, then, well, maybe I was actually good enough. I still have that assignment paper book, even now. Every time I'll be looking through my papers and I run across it, I can't help but smile.

- Having graduated with a nursing degree from North Central State College, I like your statement about “being a nurse by trade and a writer by nature”. How much of what you write is based on inspiration?

Because of what I do, what I have done in my past work experience, as well as what I've seen, witnessed and the people I've had the pleasure to know, I find that I am inspired to write quite often -- usually on a daily basis. I may find myself jotting down notes on the back of a napkin while out to eat with my family after talking to them about someone I knew while working at the nursing home; I may type up a story in-between checking my email when a message I receive reminds me of a person I treated at the hospital; or I may sit at the dining room table, scribbling in my notebook after watching a movie that made me remember someone I lost long, long ago.

Do I think that a person is born a writer? Of course -- I think I was. However, even if a person wasn't born a writer that doesn't mean that they can't learn to love it, to want to live the life of a writer, to do it for a living, or learn to be a damn good one. No one is born knowing how to ride a bike, play football, bowl, type, or flip pancakes. You learn how to do these things by doing them, practicing them, and then doing them again. Then one day, before you know it, someone looks at you and says, "Hey! You're pretty good at [that]!" The same can be said for writing, too.

- As a busy mom of three, can you give us an example of how you structure your day or week in order to make time for writing?

The only good advice I can give for making time for writing, is: to make time for your writing. I know -- doesn't sound like that makes sense, does it? But if you think about it, just as one size blue jeans won't fit every person's body, one way of making time for your writing isn't going to work for every writer, either.

What worked for me was thinking of it just as if I was going to work outside my home. Depending on the time of year (whether it was summer break or the school year for he boys), I would have a set work schedule. During those set hours, I worked -- period. I didn't answer the phone (unless it was my husband or the school calling for one of my boys), I didn't answer the door, and I didn't run errands. Some days I was very productive and wrote like crazy. Other days, I was lucky if I wrote an opening line or an email. But I stuck to it.

Now while this worked for me, it might not work for someone else. They need to find something that will work for them. It doesn't matter what it is, as long as they are making time for their writing.
- I have been a member of MomWriters.com for many years and have been impressed with the support and encouragement provided within the group. In your role as Senior Administrator, do you feel it is important to reach out to new member as well as support existing?

I can't express to you in the words I can offer here how important I feel it is to reach out to new members, as well as for the "veteran" members to continue to support each other. It is SO important.

There are writers out there who don't have support in any aspect in their life when it comes to their writing. They want to write -- it pains them they want it so badly. They do it in secret if they have to. They have tried to share it with their family and friends but have received feedback such as, "Why would you want to do something stupid like that?" or "You can't write -- you're not a real writer!" or maybe even, "Who do you think you are? J.K. Rowling?" Their efforts may be met with laughter, or anger, and it makes them feel that writing is not worth all of "this," so they quit, they don't write anymore.

Momwriters gives these writers a place to turn for support when no one else will support them. We offer them a place to say, "I want to write but my family says ..." and we listen, we hear them, and we know how they feel because more than one of the 1700+ of us have been there. We let them know that it is okay to write and that they CAN do it. We help them see that if they want to write -- if writing is what they really want to do -- then a nonsupportive family of friends who don't understand should not stop them.

We have all been "beginners" at one time in our lives and we all know how scary it is. By offering each other support, Momwriters helps to make the whole process a little less scary.

- As we wrap up our interview, I’d like to ask you to share something about the business side of your writing profession. What have you found to be helpful?

One of the things that I have found to be the most helpful in my writing career is the types of contacts I have made. I do a lot of medical and writing related to woman's issues, so naturally, I have made contacts in the medical field. By keeping in touch with these people, communicating them, keeping the lines open, and letting them know where I am writing needs, I am able to keep up to date on any new trends, phases, policy changes, latest crazes, etc. Often times, I get new leads and article ideas as a result. It's always a good idea to make contacts in the area of writing you specialize in, as you never know when one of these contacts can lead you in the direction of something very exciting and new.

You can visit Carma at her blog, CarmicWords.blog.com . To learn more about Mom Writers, visit MomWriters.

Automobile Business Expenses

by Brigitte Thompson

When you drive to interview someone for an article, to the library to do research, to an appointment with your publisher, to the store to get office supplies, or to the bookstore to purchase a book related to a project, you can track your mileage and produce a business deduction.

The miles that you drive which are in any way related to the operation of your writing business, or the actual expenses required to maintain your automobile can be deducted from your income at tax time. This is one of the most overlooked tax deductions for writers.

Want to learn how to take advantage of this deduction? Chapter 5 of my book, Bookkeeping Basics for Freelance Writers, is devoted to it. Order your copy today!

“Connect with others in the industry. Writing is a lonely profession and writers are vulnerable to feelings of isolation. Get connected through online writers groups, go to conferences, join social networks, and work at building relationships with colleagues.”

Brenda Nixon, M.A.
Author of The Birth to Five Book and National Speaker
Brenda Nixon