My brain has weird compartments when it comes to writing professionally. Some stuff I got right off the bat – writing every day, holding myself accountable to deadlines, etc. But other parts of writing as a job seemed to be in an entirely different dimension so far as I thought about them, things like, say, money. This is weird because I’m a pretty mercenary person in my non-writing life. My husband and I were poor college students long after we left college, and so our financial teeth are pretty well cut – we keep our affairs in general good order, never pay full price, and use things until they explode. (Hello, microwave! Why, you say your display doesn’t work? Eh, you still heat food (kind of), keep going!) (My kitchen is like a Siberian prison, we work them till they die).
Anyway, all of this goes out the window when it comes to money I get for writing.
The story goes like this. When you get an agent and your agent sells your book and your new editor accepts your book, you will receive (at some point in the future) a check for whatever part of your advance is currently owed to you, less your agent’s cut. Question: What do you do now?
I’ll give you a hint, it’s not what I did. See, I got this check and I stashed it in the bank to pay for future time off while writing. I knew vaguely that I’d have to pay taxes, so I didn’t spend it. Instead, I sat on it. And sat on it. Annnnnd sat on it. You see, I’ve been a wage slave all my life, I’m used to getting my W2s and filling out my little online tax sheet and mailing my check off to the government in April. So I sat and waited for someone to send me a bill, or a form.
Turns out, when you’re working for yourself, this isn’t how it works. Writers, being self-employed contractors, pay quarterly estimated taxes. This means you have to look at the amount of money coming in and guess how much the government’s going to want, then mail it to them. It’s not that vague, of course. There are forms and exemptions and special circumstances and all kinds of crazy, which was why I decided (after two hours trying to read that gobblty gook they call the IRS website) to get an accountant.
This was the smartest choice I’d made in a while, because during all that sitting around, I’d missed 2 quarterly payments and was (unknowingly) looking down the barrel of an angry IRS and some fines I’d rather not pay. This is no fun, and it happened because I was not professional with my writing money. I didn’t learn the rules of this new game I was playing in, and I almost screwed myself over. Fortunately I’d only been sitting on the money instead of spending it, otherwise this entry would have had a lot more frowny faces in it (:().
What I’m trying to say is don’t be like me. Don’t assume other people, be it your agent, your editor, your spouse, the internet, the government, whoever, is going to tell you what to do. Learning about becoming a writer doesn’t end at the book c0ntract. It’s up to you to take care of your business, and that includes (if you’re writing professionally) money. When you get that check, preferably BEFORE you get the check, you need to know where it’s going, because if you don’t, it will go without you knowing. Just as you are the only one responsible for your words, you are the only one responsible for your dollars. As every writing site in the world loves to say, treat your writing like a business, and as any small business owner knows, taxes are a big part of business, don’t forget about yours.
**Everyone’s financial and writing situation is different, but I wanted to include some of the links I found on my quest to keep the tax man away from my door. I hope you find them helpful, or at least interesting. Remember, consult your own expert before making any decisions, even if your own expert is you!**
Publishlawyer.com – “Taxes and the Writer” (very lawyer-y, but lots of good information if you can keep up with him)
Tara K. Harper – “Taxes and Finances for Writers” (thorough and clear)