The Tax Man Cometh . . . and He’s Here to Help

If you’re like me and you’re a word lover, the IRS tax forms with all their lines and numbers send you into a panic attack. I get it. No matter what political persuasion you are or whether taxes bring you joyous refunds or difficult fees, filling out the dang forms can be a stressful endeavor.

If only you could get help—good help, help who knows what they’re talking about. If only there was a website that would answer your questions about your life as a writer and whether or not all of those expenses count on your tax returns (even if that long-sought-after royalty check has yet to arrive . . . or be promised).

Today, my friends, “if only” is here. I offer a helper whose passion is Tax Solutions for Writers (which also happens to be the name of his website). Gary Hensley was an accountant for his entire life, an IRS agent and auditor for part of it, and one of the guys who answered the phone for TurboTax if someone needed help.

He knows whereof he speaks. [Update: Gary Hensley passed away in 2018.]

Every year, our Professional Writing department at Taylor University invites Gary to talk to our students about acting like writers and filing their taxes as such. (In addition, you can catch Gary every year at numerous locations, including Midwest Writers Workshop where he is always one of our most popular speakers.) Or you can go to his website that has every question you can think of, and many you probably haven’t.

Here are just a few things I have learned from Gary about handling my tax returns.

(1) You don’t need to be an official “business” to be in business as a writer and to file a Schedule C for deductions. If you are busy writing (sending out articles, researching that novel, attending conferences to improve your skills), you are a writer and should treat yourself as a professional on your tax return.

(2) Purchase a $5 planner that you can carry with you. In it, document every single activity that you do that shows your activity as a writer. Write down what you did at your desk (your home office area) each day. Track the time you spent writing and what you did. This separates you as an active writer (even if you’re not published) from someone who is sitting around thinking he’d like to write a book someday. You are actively writing. That makes you a writer.

(3) Then use those daily slots to document writer expenses. Maybe you subscribed to a particular magazine or website to help you with information for an article or book. Maybe you attended a conference. Maybe you purchased books about the topic you’re writing about or simply to improve your writing skills. Then, of course, find a place to keep those matching receipts.

(4) In that diary, also keep track of mileage for writerly activities (not just miles, but write in the actual odometer readings to and from anything that had to do with your work—and write next to it the business/writerly purpose for your trip). Perhaps you drove to the library to do research. Maybe you drove to interview someone and purchased lunch for you both. Track the mileage to that writers conference.

(5) Get a separate bank account for your business that has a debit card attached. Again, you don’t need to be an official DBA or LLC or Ltd. or anything. But this particular bank account holds only the money that you earn as a writer (yes, even that $35 for the column you wrote), and it tracks anything you purchase for your business (printer paper, stamps, books, conferences). Maybe you don’t have income, or nothing really worthy to call that. Doesn’t matter. Get in the habit of separating out your writer life from the rest of your life. I know, you may need to lend yourself money back and forth in order to cover a business expense (like a conference—the $35 article won’t cover that), and Gary explains how to do that on his website. The point is to keep your writerly income and out-go separate from the rest of your household.

All of this documentation will make it easier both when you go to fill out next year’s form and if you ever get audited. These expenses are deductible on the Schedule C, so you want to take advantage of them and you want them to be accurate.

I know. The forms are difficult, but it’s time to take hold of your writer self and claim your professional status. Check out Gary’s website for answers to other questions.

And go purchase that journal to track this year’s activities! (Oh, and write down the odometer reading before you go and when you get back!)

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