If writing is what you want to do for a living, sooner or later you’re going to need to eat. I had a friend some time ago that ate at least a small quantity of cardboard every month to ward off hunger pangs.
This is not a good way to live (although he claimed that with enough chilli you almost didn’t notice that you were eating cardboard).
Other than the obvious solutions; get a job, mooch off your folks, take up a criminal enterprise, there are a few things that you can do to maximise the amount of money that you are getting to support your writing habit.
The big one for me was setting myself up as a business. If you are looking at making this your life then telling the tax department that you’re writing for a living can provide you with several advantages that slaving away as a hobbyist just can’t provide. Of course this will vary from country to country (and state to state if you’re in the USA) and your different tax rules, but most income tax can be claimed against costs incurred in running your business.
You will need to set up an area in your house or apartment that is just for writing. You will need to know how large this area is in square metres or feet compared to the rest of your house. Just for simplicity’s sake, say your writing haven is ten percent of your home’s floor area. This means that you can claim back ten percent of your expenses, including rent or mortgage payments, power, internet and phone charges from the amount of income tax you have paid this year. This amount will be used to offset your income tax and (hopefully) get the tax man to send some cash your way.
The golden rule in all of this is to get an accountant first. Tax rules vary so much, and are often so complex in regard to home businesses, that asking the tax department for money without first speaking to a qualified local accountant is like soaking your hair in gasoline and then lighting a cigarette. Sure you might get away with it, but it’s not the best plan you’ve ever had.
Again, depending on where you are, you may have to show that you are earning something from your writing or risk being reclassified as a hobbyist. If you’re also doing some freelance work then this shouldn’t be a problem, but if you are only writing fiction then you’ll need to work your posterior off to get some fiction published.
Of course if you’re a published author then getting classified as a hobbyist is unlikely even if your earnings are slim.
You’re not going to get a million dollars back, but you might just get a couple of rent payments, or a computer upgrade and that makes the little bit of hassle worth it. You can even claim back the cost of getting an accountant against next year’s taxes.
I hope this is useful to someone out there. In the current climate every cent counts.
See you next time.
Andrew
Tags: accounting, advice, cash, living, money, tax
