Wednesday, July 26, 2017

Business 101

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I talked with Tim, over enchiladas and Negra Modelo at our neighborhood cantina (bar), about hiring an editor for my book, because, you know, five plus bills is a lot of money! Tim agreed that I needed to do whatever it takes to do to get this project where I want it to be, then, being the practical man he is he asked, “Is there any way we can write off some of your expenses?”

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Hummmm. Very good question, Tim.  We discussed our knowledge of small business ownership (which was very limited) and decided to do more research when we got home.

Turns out the IRS does recognize authorship as a lucrative business. We found out all sorts of good information.

First of all, there's an IRS formula to determine if my writing is considered a hobby or an occupation. Both can have deductions, but of course, an occupation’s deductions would be higher. Also, the IRS gives writers about three years to show a profit before being possibly re-categorized as a hobbyist. I think that’s pretty generous of them.

Receipts for pen, paper, ink, an all other things writing can be deducted (at a certain percentage) from my taxes, as well as fees for conferences or classes I attend. Wow!   I’ve just started a receipt file- see how business-like I am!

My office. My refuge.

Additionally, expenses for promoting my book can be covered, as well as home office use if the office is used for writing only and for a good percentage of the day. (There’s a formula for that too!) Since my granddaughters sleep in my office when they spend the night, I’m pretty sure I’m not going to be able to use it as a deduction…yet.

Courtesy of Google Images
Oh, and about hiring an editor: If I pay someone over $600.00 for any service, I have to ask them for a W-9 and report the payments on a 1099-MISC and on an equivalent form from the state I live in. (Huh? My eyeballs are glazing over..)

I’m so glad Tim asked the question. I’m learning a lot about being my own business woman. (The first decision I made was to offer the job to Tim. He declined.)

My book, THE INK OF TIME, is off to four beta-readers. I will have the binders back by mid-August. I’m researching editors and have a couple selected to contact. 

There’s a lot more to learn but 'Business 101: Make sure you know IRS Requirements' are number one! I’m getting there!

Until next time,

Be Good to Yourself.


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