Thursday, April 15, 2010

Tax Tips For Writers

As I zombied out of bed this morning, I thought that I would share a few nuggets of tax wisdom with my fellow writers, based on my experiences over the last week doing my taxes. I finally finished in the wee hours of the morning last night, but there's no reason your experience can't be better than mine!
  • Turbo Tax is a friend. Look, it's all well and good to be doing your taxes by hand. You're a smart person, and you can do it. But let's face it, we'd all rather be writing. Turbo Tax is your friend - your friend who remembers to ask you things like, "Would you like to enter your home office expenses now?" and "Did you know you qualify for a deduction?"

  • Save that receipt and write on it. You know you should be saving your receipts. You may even have a system. What you really need, however, is a ball point pen. Use the pen to write on the receipt what it is for, why you are saving it, the amount, and the date. This not only helps you get the receipt categorized properly, it also saves you when the faint printing on the slip from the store or restaurant fades out entirely. You won't be staring a smudgy piece of carbon paper wondering, "What was this for?" when you've got all the data in real ink.

  • Print out statements and summaries. I know, I know... the trees are crying. However, when I'm trying to find the transaction that matches up for my set of drawers for the office, being able to flip to it on the printed page vs. having to scroll through pages online is a real time saver. Also, you can then bundle these statements with your notes and tax forms for filing, so that everything you need will be in one place should you ever be audited.

  • Remember deductions mean you, too. Just because you are self-employed or work out of your home doesn't mean you don't qualify for tradition work related deductions, so be sure to check for them. For example, in 2009 we have a $400 Making Work Pay credit available, but I wouldn't have thought to apply for it if my Dad and Turbo Tax hadn't mentioned it.

  • Extend if you must. Extensions are available, and you can file for them online. The catch is that you have to pay what you think you owe now, or face penalties later. However, if you're really struggling to sort things out, go for that tax extension. Just don't procrastinate about getting them in later!
I'm sure there are many more tax tips out there, but these were just some that I'm focused on today as I finish my 2009 taxes. I've already made notes to make next year easier, and I love hearing everyone's tax advice!
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