Yesterday I talked about all the lovely tax deductions writers can get. But I forgot to add the most important point. You have to keep track of those expenses. Here’s how I learned to handle that "tacky" detail.
One fateful year, I received a terrifying call from my accountant, reminding me that because of the high volume of sales of Beyond All Price in the last quarter of 2011, I owed the IRS a quarterly payment on my 2011 taxes. All she needed, she told me, was a list of all my income and all (read: ALL) my book-related expenditures over the past year.
Have I been keeping those records? Well . . . sort of. I have a couple of file folders at the corner of my desk into which I've been stuffing receipts and credit-card bills. And I had started out last year by downloading a highly recommended program for organizing those receipts. I just hadn't actually kept the records up to date. Arrrghh!
Gamely I dug out all those little slips of paper and opened my expense record, only to be horrified by how complicated it was. It had a separate sheet for each month, with a row for every day in the month. And each sheet had some 35 categories of expenses, each with its own column on a spread sheet that measured some 18 inches across. That meant I was looking at over 8000 little cells to be filled in before the actual calculations even began. I started sorting my little pieces of paper into monthly piles. I didn't take long before I realized that this program was major over-kill, and much too complicated.
When I couldn't find a simpler version that seemed designed for the kinds of expenses writers and indie publishers incur, I decided to design my own. The result is a simple template that works on any computer that can handle Excel. It put all my expenses onto just 1 page. Just set your page to portrait and under the print function, scale to about 80% or 1 page wide and 1 page tall.
The layout is simple. It has three sections: one for travel expenses, one for day-to-day expenses, and one for including the figures for a dedicated home office. You get just one cell for each expense during a given month, so you may have to do a bit of addition on your own--adding all your postage, for example. And travel mileage needs to be converted to cost by multiplying it by the IRS allowance for mileage. (That's not as complicated as it sounds. The current allowance is $0.50 a mile, so you just divide the number of miles by 2 and add a dollar sign.)
When you're finished entering your numbers, the spreadsheet calculates each type of expense (in the rows) over the course of the year and the total for each month (in 12 columns.) At the bottom right corner, you get the grand total. Simple. There are also some blank rows, so if you need to add some new categories, you can just type them in. The "total" formula is already entered in the blank cell at the end of each row. I finished my calculations in a single morning.
It was so easy that I decided to share the template here. I’ll post it tomorrow.