Consider working with a professional
Harpaz, Karras, and many other writers work with tax professionals who have experience working with freelancers, the self-employed, people in the creative arts, or small businesses. “If you’re making more than a few hundred dollars a year or starting a business, you should talk to an accountant,” says Karras. “Ask questions like ‘What kind of entity should I set up?,’ ‘How should I track expenses and income?,’ and ‘What are the red flags I should keep in mind?’ It will save you time, money, and stress.”
Karras emphasizes the need to check in about all tax issues, particularly on items that might get you audited. “I’ve heard writing off the home office can be a red flag,” she says. She has a shared co-op office for work, which she deducts.
With the latest tax reform changes – including a new 20 percent tax break for “pass-through” businesses that will affect some sole proprietorships, including authors – now may be the best time to talk with a tax professional. Whether or not you talk to an accountant at the start of your writing career or every year at tax season, Karras says, “your writing is a business, so treat it that way.”
“Be confident about your value,” says Santos. “You are a legitimate business professional, and you bring more value to others’ lives than most other businesses. You should be able to benefit from what you have to do and spend.”
—Jennifer L. Blanck is a freelance writer whose articles and essays have also appeared in the Christian Science Monitor, Entropy, Toastmaster, Whole Grain, and Wine Business Monthly. You can find her on Twitter and Instagram @JLBlanck.