Writing workshop - quick advice - taxes

I have been working since 2am on taxes today.  It's currently 10am my time.

Believe it or not, tax stuff has been quicker and easier than ever this year for me to get my hands around, and I have some advice to pass along to current or wannabe authors.  My advice is geared toward folks in the US, but is likely relevant anywhere.

#1 (and most important): Get a separate credit card for business.

This simple change in your life will make everything 10000% easier come tax time.  Seriously.  You can use your business credit card for all the stuff you plan to declare for taxes.  (Side note, do research on what is and is not acceptable to declare as an expense.  The answer to some of this will depend on what you do for a living, and what will seem reasonable to an auditor.)

By using a separate credit card, I don't even need to look at paypal anymore.  All I need to do is get my statement for this card at the end of the year, and I have the majority of stuff I spent money on listed in a PDF, and I have the total.

This makes it easier to give that total for taxes, and also will help if you ever get audited.

#2  Realize you are a small business person.

Whether you're an indie writer or publishing through a traditional publisher, you are a small business person as an author.  This seems simple, but the realization can be powerful.  A lot of people start off writing without understanding the sheer amount of admin work or other considerations that are involved with working for yourself.

A few things to consider as a business owner are books, expenses, and yes, taxes.

The quicker you can adjust to the reality of owning a business, the easier /everything/ will be in the long run.

Some more specific advice here is to look into business tools and solutions, like buying a program to help with your books, keeping detailed records (which I do), or developing sophisticated spreadsheets to track income and expenses.

#3 Turbotax ain't gonna cut it anymore.

Cheap or free tax programs/solutions for the average person are not designed for a small business owner.  Turbotax and other similar programs are great for people getting paid via a W2, and who have fairly simple taxes.  If you're taking a standard deduction, this is the way to go, sure.

But the more complex your life is, the more likely you will itemize, and the less useful simple solutions are.  Once you start making money as a small business person, especially after going full time, I highly suggest getting an accountant, a book keeper, or both.  Having a tax professional help with your taxes can save you money in the long term, and more importantly will likely help prevent getting audited or having your hand slapped.

One of the worst things a small business person can do is try to take advantage of the system, thinking they're clever, then find out the IRS has -0- sense of humor.

It's best to just play by the rules, and pay someone to help you navigate the (increasingly more complex) tax code.

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Anyhoo, I hope this helps you, or at least was a good refresher!  Does anyone reading this have any more tax related advice?

-BC