Weird tax question

[violet]

Violet, it was my agency's payroll person not a CPA.  I will definitely be going into a CPA when the money gets here, but I'm planning some business trips and paying off student loans so I just wanted an idea of budget for the next year.  Planning for less can never hurt, but hoping I can find a good CPA around here.

Gotcha. Yep, your agency will be paid the full amount and then they will cut you a check for the 85%. They have to pay taxes on that 15% because it's money they earned. You pay taxes on the remainder because it's what you earned.

And it's good to budget because sadly, whatever you get, the govt. will take nearly 50%. Ouch. Being in the tax business, we're often the bearer of bad news.

 

[Terri_Martin]

You might ask several other published writers in the area for CPA recommendations. It's worth the search to find someone who's willing to work with a microbusiness and who has some understanding of publishing, or at least knows that the IRS term "royalties" does not necessarily refer to income from oil wells!

[dzolidis]

Other tax advice:

I used turbotax small-business edition, and I've managed to use that the last few years. I listed myself as owning my own business (playwright/writer), and it can walk you without too much of a headache.

If you do go with a CPA, make sure you get deductions for your home office. You can write off a percentage of your utilities, depreciation on your computer and printer, even your internet service. (You can also buy a new computer and count that as a business expense!) Make sure to keep receipts for all this stuff, though.