5 Simple Tax and Accounting Tips for Writers
A Guide for authors on handling their finances
1 ) Organising Your Paperwork
It seems self explanatory but finding a filing system that works for you is vital. If you don’t you will risk the chaos of sifting through all your incomings and receipts when it comes time to file your tax return.
Some steps you could take to keep organised include:
Keep your books up to date - Note down your incomings and their associated outgoings
Note down your expenses and organise their relevant receipts (there are mobile apps that can help you with this now)
Keep a folder of relevant documents such as claim forms if you are claiming benefits
This will not only save you time and energy but also a great deal of stress when it comes time to file your tax return!
If you have an accountant (or looking to hire one) organising your paperwork will also make the process more seamless enabling them to spend more time on finding ways to reduce your tax liability.
2) Keeping a Record of Your Expenses
We referred to this above but it is worth reiterating - organise your expenses!
The scene is set, you are the majority of the way through the filing process, the end is nigh! But wait, the HMRC are asking you to calculate and enter your expenses. You plant the palm of your hand firmly on your forehead; you have realised that the contents of that dust ridden bin bag positioned in a forgotten corner of the room contains all of your relevant receipts! Now you have to pour all of these receipts out of the bin bag and trawl through them, hoping you can make sense of when they were from and what they were for.
You may laugh (hopefully you have as it signals you are at least more organised than this), but believe me, as deadline day approaches situations like this are occurring throughout the country.
Whether or not writing is your main source of income or not – it is a great edition either way to create a record sheet or document for your expenses. It would help you to see how much you’re spending whether it’s weekly, monthly, or even annually.
By being self-employed, you would arguably have to be careful with your expenses. A good way to do so would be by signing up to an accounting tool such as Quickbooks Online or Xero, this will help ensure that you’ve kept a record of all items purchased as well as how to run your self-employed job as a corporate would with their business.
3) Separating Your Bank Accounts
It might seem like an obvious one – or maybe not, either way it’s a good idea to keep separate accounts, with one allocated account with a sole purpose of saving for your tax payment. This will allow you the peace of mind that you have a calculated amount set aside for your taxes, it’ll keep everything nice and clear for you. A bonus tip involves saving for your taxes from your first yearly payment, this will most likely make you over save for your taxes thus allowing you to give yourself a well deserved bonus once your tax return is done. All from your own pocket!
4) Learn About The Deductible Expenses You May Be Missing
Being aware of what you can and cannot claim on your expenses as a self-employed individual is vital when it comes time to file your tax return. Common claimable expenses include:
Stationery
Theatre and Cinema Tickets if for the purpose of research and are within the authors relevant genre
Courses and Conferences
Repairs and Maintenance relevant to the tools that a writer may use
Accountancy and Professional Fees
Reference books, CDs, journals and Newspapers if relevant
These are just a few of the expenses you may be able to claim.
It is worth noting that all expenses must be relevant to your profession. If you are unsure about a particular expense you are going to claim, our advice would be do not claim it. Instead seek the help of a professional tax advisor. You can receive very hefty fines if the HMRC find that you have claimed expenses that they deem as unacceptable.
5) Hiring an Accountant
As a self-employed individual taxes can be complex, and overwhelming. The easiest and most efficient way to file your taxes is to hire a tax professional. Not only will you save yourself a great deal of time and stress but a professional tax advisor will know every area that could be saving on your tax liability thus saving you money.
