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Avoid bad tax surprises: Editor's Notes #335 March 17, 2021 |
| Hello, —Herman Wouk In this issue: 1. Avoid bad tax surprises 2. Tickled my funny bone 3. Interesting Web site 4. Writing prompt 5. My Covid-19 offer to you 1. Avoid bad tax surprises It’s not that taxes are bad. How else would we fund the services we value? But surprise taxes can put a strain on our budgets. In previous issues, I’ve written about expenses that writers sometimes forget to claim, and I won’t list them again here. The only fact I will reiterate is that in some jurisdictions, writers can claim business losses for a set number of years before earning income. Check with your tax office or an accountant who understands taxes for artists. Most artists, including writers, are not on salary, so we have intermittent income. That’s one reason we get to front-end load our expenses. But there is another issue related to intermittent income. We seldom pay our income tax when we get our writing income. There is no deduction at the source like there is if you have an employer who submits income tax to your government(s) on your behalf. This puts an extra burden on you and can give you a nasty surprise when you calculate what you owe at tax time. Your intermittent income could be in the form of an advance or royalties. If you have an agent, you can negotiate to have your agent submit a percentage of your advance or royalties to your government tax account. If you have self-published or you are a freelance writer or if you are getting an advance or royalties but do not have an agent who submits taxes for you, it’s up to you to prepare for a bill at tax time. One way is to put aside a percentage of all writing income as it comes in. Some people use a separate savings account for this purpose. The amount you choose to save for taxes can be adjusted to match your rate of taxation, bearing in mind that in many places, when your income goes up, so does your tax rate. Check with your government or an accountant to help you plan how much to save. You may also be able to pay your taxes quarterly to lighten the shock of a big bill in your final quarter. In 2020 many governments distributed Covid-19 relief money. Some of this may be taxable. Since you are reading this online, I suggest you check your government tax agency Web site for the status of any extra money you have received. Although the pleasure involved in paying taxes could be likened to the pleasure involved in a tooth extraction, with a little preparation, you can avoid any bad tax surprises. =========== 2.Tickled my funny bone Why doesn't Sherlock Holmes pay any income tax? Because he makes so many brilliant deductions. =========== 3. Interesting Web site Each jurisdiction has its own list of deductions for writers. Here is one. Remember to check what can be deducted where you pay your taxes. https://www.nolo.com/legal-encyclopedia/tax-deductions-writers.html =========== 4. Writing prompt Taxes are not the only place where we calculate gains and losses. Think of another place where a character needs to weigh gains and losses and write one page that shows that calculation. I’d love to see what you do. =========== 5. My Covid-19 offer to you Saving on your taxes is one way to keep more money. Another is to take advantage for the Covid-19 offer outlined here. The current plan is to hold the offer open open until September 2021. What follows is a copy and paste from issue number 309. The offer is still in force for you and anyone you choose to tell about it. Along with the health threat hanging over the world, we are facing a huge financial hit. I’ve decided one thing I can do is to make quality editing less expensive during this trying time. For subscribers to Editor’s Notes and their friends, I am suspending the fee for the sample edit to anyone using the code EN19 until I cancel this offer. I intend to keep this offer open as long as the world is in crisis with Covid-19 and its aftermath, so watch this space. I will give a warning here before I pull this offer. You can submit your writing sample at https://www.writershelper.com/sample-edit.html Be sure to click the link below the heading "Promotion Code" to get to the special form for a free sample edit. If you find yourself at a form before clicking the special link, scroll slowly back up the page, and you should see the link for the code (EN19). But it gets better… When I return an edited writing sample, I include quotes for the full range of my editing services. Until further notice, I will give a true quote, but I will not charge writers the full amount. I am discounting my services 50% for subscribers to Editor’s Notes and their friends. I will give a warning here before I pull this offer. Feel free to pass this offer along to any writing friends you think may be interested. As long as anyone uses the code, I’ll honour the offer. This is what I can offer you in this time of crisis. I hope it encourages you as you face possible illness and financial uncertainty. =========== Join Writer's Helper Facebook page at https://www.facebook.com/WritersHelperEditor Follow me on Twitter @AudreytheEditor Link on LinkedIn https://ca.linkedin.com/in/audreyowen (Email me first so I know how you know me.) =========== If you know a writer who would appreciate receiving Editor's Notes, forward this issue. If someone has passed this on to you, you can get your own free subscription by signing up at https://www.writershelper.com/newsletter.html |
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