Chris Orcutt, Writer

First, a few basic tips to make tax time in general easier:

• Have a separate bank account for writing-related income.
• Have a separate credit card for writing-related expenses.
• Always try to pay expenses with a credit card—no matter how small. You'll still want to keep your receipts, but if they're on a credit card statement, you won't have to dig them out and add them up.
• If you don't have a separate credit card, each month highlight writing expenses on the statement.
• Transfer your expenses from the statement to an Excel spreadsheet each month. Here's a jpeg of a sample one.
• Keep a file in your filing cabinet for cash receipts.
• If your taxes are complicated (you have your writing business plus larger W2 income and a mortgage, etc.), hire a professional to do them for you. The costs of this are deductible in the next tax year.
• If your taxes are pretty simple, just buy a piece of tax software to aid you. Until this year, I had always done them by hand, with a calculator. For us right-brain types, this is a formula for a stroke.

Now, a few tips on information you'll want to have on-hand before you start:

• Any W2's, 1099s from writing assignments, interest income statements, etc.
• If you have a dedicated home office (a separate room with a door that closes, and said room is used ONLY for your writing business), have the total square footage of the room as well as the house/apartment as a whole.
• Your utility costs (electric) for the year.
• DSL/Cable Modem expenses.
• Web hosting and domain name fees.
• Postage expenses, including FedEx and UPS.
• Media costs: if you're a writer this will be mainly books, but if you are actively pursuing screenwriting, you should be able to deduct the costs of your movie tickets and Netflix fees.
• Computers and peripherals: date purchased, original cost, date put in service (from previous federal 1040s), accounting method (200DB is common). ALSO, know whether or not you took the Section 179 deduction for the item because if you did, that means you deducted the entire expense the first year of service and therefore CANNOT take depreciation.
• Cost of office supplies.
• Advertising costs: like Publishers Marketplace.com.
• Travel and meals expenses—that are directly related to your business, including hotel room stays and meals for business trips.
• Car mileage: # of miles driven in 2006, plus the # of miles driven for business use of the vehicle.
• Fees for conferences or professional association memberships.

The most important piece of advice I can offer is this: be organized. The better prepared you are when you sit down with your tax forms, software or professional, the faster the whole process will go.

Here are a few excellent websites with more on taxes for writers:

Absolute Write's "Tax Tips for Writers"

Poets & Writers' "The Practical Writer" Tax Tips

About.com's Tax Time series

Tax time sucks, but if you "get all your ducks in a row", it can go smoothly, saving you a lot of money on April 15. Good luck.