Monday, March 19, 2018

Organization Tip: Expense and Earning Logs #AuthorToolBoxBlogHop



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PLEASE NOTE: I am not a tax pro. This post isn't really about taxes but keeping track of your expenses and earnings. 

With the start of a new tax year, it’s time for you to implement a good strategy to keep track of all of your expenses and earnings. This is a great way to keep you in your budget as well as organized. Even if you don't make enough for taxes, you will want to keep track of your expenses and earnings, as you never know when you'll need the info.

I have a red binder next to my desk with sheets of lined paper where I can jot down every expense, big and small, as well as my earnings, including sales and service fees I make.

In that same binder is an envelope where I store receipts.

For online receipts that I receive through email, I put them in a folder in my inbox. You can print them as they come and keep the emails for backups.
I also use PayPal for all of my writing expenses and for my editing service fees. PayPal is a great way to keep track of what you spend and earn, because PayPal does the work for you. You can use it to double-check your logs and as another source of proof if you lose the receipt email.

When it comes to expenses and tax deductions, keep a careful record of everything. No matter how small.

Here are the things I’ve put in my expense log:

-      Book event table costs
-      Books bought for events
-      Book event SWAG
-      Copyright application fees
-      Business cards, bookmarks, postcards
-      Author banner
-      Formatting fees
-      Illustrator fees
-      Editor fees
-      Website renewal fees
-      Postage/shipping supplies for mailing books (Make sure you use Media Mail)
-      eGift cards and giveaway items
-      Ads paid for
-      Award contest fees
-      Book easels for my table at events
-      Money lock box for events
-      Rolling cart for events
-      Desk and bookcases
-      Computer/laptop/devices
-      Printer ink and paper
-      Notebooks and pens
-      Internet costs
-      Mileage/Gas for traveling to events                                                                                

Anything and everything you spend as a writer/author should be added to your expense log. I like to divide my expenses into months and calculate each month’s expense. Then I add those numbers together to figure out the total amount I’ve spent. I do this throughout the year.

By doing these things, you will be able to handle your budget better and be ready for taxes.


QUESTION: How do you keep track of your expenses and earnings?


80 comments:

  1. Yes!!! As someone who works in this industry, I could reach through this screen and kiss you right now. You are a tax preparer's dream! No box full of random scraps of papers from you. You're neat and organized! I love it! Great tips!

    Elsie

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    1. HAHAHA! Thank you, Elsie! I am glad to make a tax preparer happy. :D

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  2. I especially like the tip about keeping the binder/envelope/online folder handy to jot/store things in when they come up. No scrambling for you! :)

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    1. Nope, no scrambling for me. I just have to reach over. :)

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  3. Great tips and looking inside at someone doing it. Thx.

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  4. Deduct anything and everything you can!

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  5. This is an excellent list. I'm lucky my husband is savvy and does out taxes.

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  6. I only wish I could someday have to keep track of that! My return investment on what I did spend on my books published to date was so embarrassingly poor, I didn't bother writing it up as a tax deduction.

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    1. I barely make an investment on what I spend. Usually, I crack even or earn just a tiny bit over my expenses. But keeping track and having records is important because you never know what'll happen. One day, you may need to prove your net earnings. Plus, this is just a great organization thing to do so you can see what you spend and where. :)

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  7. Hi Chrys - what a great list and post - which has to be necessary for most of us - cheers Hilary

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  8. I love the monthly breakdown that way you can see how the year is adding up or whatever the opposite of that is and set goals for next year.

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    1. Yes! And it lets me know if I'm spending too much versus what I'm earning, which is usually the case. lol

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  9. This is such a comprehensive list! Thanks for sharing. Your post is quite timely as I try to sort out costs of publication and what all that involves. Cheers - Ellen

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    1. I'm glad my post is timely for you, Ellen! I hope my tips help you figure out how to plan and work through the costs of publication. :)

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  10. Great list. I don't have anything to deduct yet so nothing to save.

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    1. Aw. Shucks. Well, one day this info will come in handy. :)

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  11. Earnings? What are they? lol There is a lot of expenses that some can miss. I've had people give me a year's worth of crap all random in a box to do, pfffffffffft to that crap. I either charge them more or they can take a hike haha

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    1. Haha. I barely get any earnings, but keeping track is a must for me.

      I would hate someone handing over a box of crap for me to deal with. All we have to do is be more organized, keep ongoing lists, and save receipts as proof.

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  12. *hides head under pillow* Taxes? What are taxes?

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    1. Haha! Tax season is almost over. You can come out soon. :P

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  13. You are giving excellent advice. I wish more people would do this but, alas, they don’t. Can you. Claim a percentage of your rent/mortgage, utilities on your taxes since most people who write books, work from home? I keep track and monitor my spending and cut back when needed.

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    1. I'm glad you like my advice!

      There are limitations to claiming rent/utilities. You'd have to have an "office" space in your house, such as a separate room or part of a room with a clear division like a partition. There can't be a bed or a TV in there because it's only supposed to be used for work, and it has to be your principal place of business.

      Here's more info that may help: https://turbotax.intuit.com/tax-tips/small-business-taxes/the-home-office-deduction/L1RZyYxzv

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  14. Awesome excellent advice! Thanks for sharing all these!

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  15. Good tips as always Chrys. Thanks made interesting reading.

    Yvonne.

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  16. I usually just track my expenses by looking at my checking account online, though I know I should be more organized. If I was, then I wouldn't keep finding coupons that expired before I could use them.

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  17. I have a folder where I keep track of expenses, too. It's really helpful.

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    1. Awesome. An expense folder really is handy.

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  18. That a simple yet effective method, Chrys. I tend to throw receipts in a folder and deal with the totals at the end of the year (not very effective :P) I also tend to go through my bank account statements at the end of the tax year to determine revenues from book sales. I also keep in my desk top folder amazon sales reports for each month. My problem is I don't do a monthly dheck in but rather wait until that year is ending or the new one has started. I should take your advice and keep a red binder on my desk strictly for expenses and income notes.

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    1. I’d be too frazzled to do it at the end of every year. Doing it monthly and updating whenever you spend/earn is a huge time-saver.

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  19. These are great tips. I definitely will be bookmarking this for future reference. Thanks for sharing

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    1. You're welcome, M.L. I hope this list comes in handy. :)

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  20. This is some great advice. I need to get more organized with things like this--I'm still new to getting paid for writing! Thanks for the tips!

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    1. Being organized when it comes to taxes and budgets is a necessity. You're welcome, Megan! Thanks for commenting!

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  21. I'm not very well organized, but this year I've promised myself to do better and keep track of expenses, income, etc. Then I won't be hunting all over my writing room for receipts and other business items. Thanks for the reminder.

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    1. Hunting all over for receipts and such can be quite stressful. And you may forget something. Keeping track and storing things as they come prevents that. :)

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  22. I thought I was organized, but you put me to shame. Great list to keep handy. Thanks.

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    1. Even organized people can be better organized. Even me! :D

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  23. I've heard that changes to tax laws are affecting authors in the coming year. Do you have thoughts on that?

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    1. I’m not a tax pro. I looked at the new laws for 2018, and I’m not sure which ones would specifically affect authors. All I can really advise it to keep track of all expenses and earnings as my post suggests. :)

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  24. Great list. I'm lucky and my husband does all this for me. I just have to give him the receipts etc. so he can keep track :)

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  25. I use an envelope, so far not much income earned. But I'm ready if it ever turns around. :-)

    Anna from elements of emaginette

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    1. Not much income earned for me either, but keeping track is still important and a must. :)

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  26. This is a comprehensive list of expenses to consider for taxes and the business of writing. Thanks ever so much for sharing this with us, Chrys. I'll remember this!
    http://victoriamarielees.blogspot.com

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  27. What a fantastic post. I will start doing this. Currently, I have been stashing e-receipts in a email folder, but I need to be more methodical for sure. Scheduling this on Facebook!

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  28. I keep my taxes on a spreadsheet. Over the years it's evolved into something pretty complex as new earning opportunities and expenses have developed. I wouldn't be without it now. Anything where you record it as you go is much easier than figuring it out at the end of the year!

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    1. I'm not very good with spreadsheets, but I know so many people who are and use them to stay organized. Good for you! :)

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  29. Excellent tips! I'm not quite to the point where I can add writing expenses into my taxes, yet, but I will bookmark this post for the (hopefully near) future.

    Question: Do you have to have a business license before you can file taxes as a writer?

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    1. I'm barely making money through writing, but I do through editing. Either way, it's important to keep track of all expenses to know your net earnings as there are certain requirements for how much you earn (minus expenses) when you should file. And even the tiny bit you make is part of your earnings for the year.

      I'm not a tax pro. I think that depends on where you reside.

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  30. Those are great tips. So many writers aren't aware of how much they can write off.

    When I'm organized, I keep my physical receipts in a plastic folder with compartments, so they're already pre-sorted into categories. I have online folders for those "virtual" receipts. Once I've figured out what I've earned and what I've spent, the entire mess goes to my accountant and she gets to deal with it from there. Lucky woman.

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    1. Oh, pre-sorting receipts into categories is a great idea. I wonder why I never thought of that. ;)

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  31. Thank you for the detailed list. I hadn't thought of all of those expenses. I currently deduct my workshops, blog and computer expenses related to publishing, and inventory. I also have a great accountant who helps me a great deal. Have a great rest of your week Chrys :)

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    1. A great accountant is a plus. Have a great rest of the week to you, too!

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  32. Wherever possible I'd also try to conduct such expenses with the option to be emailed the receipt. It's so easy to lose physical documentation, but if you can store the information digitally it's so much easier to stay organized, I find.

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  33. I think it's different in the UK. We don't have to pay tax unless we're earning around 11K and over, and I think it's more if self employed. I've still exported to PDF for future. :) I would love to get to that stage once my studies finish.

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    1. Yes, I think the earning brackets for when you are required to file taxes is different in the UK versus the US. I'm not actually at that stage myself, but I keep track of everything so I know my net earnings just in case.

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  34. Dang girl. You're an inspiration!

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  35. You are an organizational diva. Thanks for the great tips. I will probably start tracking this now in hopes that when I do have earnings I have already formed the habit of tracking expense. Thanks Chrys!

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    1. An organization diva? I like that. ;)

      Starting early is a good way to make a habit out of it. I don't get much earnings from writing/publishing, but you should add whatever earnings you get from publishing into your other income, because your total income could require you to file these earnings, too.

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  36. It's definitely a good idea to keep proper records of all this stuff and not try to remember at the end of the tax year.

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    1. Absolutely. No rushing or stressing or hunting things down. Or missing something!

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  37. I really need to start keeping better track of the things you mentioned. I love the idea of a binder by the computer. I think that will help me. I do a good job sometimes, but I need to really keep better track of my expenses. Thanks for this list. I will be printing it out! :)
    ~Jess

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    1. Thanks, Jess! I'm sure there are other things you (and other writers) can add to that list depending on your needs. :)

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  38. Looks like you have it all together, Chrys!

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  39. Good post and tips. I simply keep a spreadsheet of what I spend and earn. I keep my receipts in a shoebox. I too use Paypal; it's great.

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    1. Spreadsheets are good. I don’t think I’m skilled in creating those, but they sure can help with organization.

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