Tax Tip Tuesday: Bookkeeping & Record Keeping for Writers

Bookkeeping is an essential part of the business of writing and includes storage of receipts, invoices, statements as well as all the required documents to substantiate both income and expenses.

Record Keeping Options for Writers

To justify expenses, it is important to establish a system of record keeping that works for you. Some things need to be recorded daily, while others can be done weekly or monthly. It is imperative that you get into the habit of saving and recording everything related to your writing business. All invoices, receipts, credit card slips and bank statements are essential documentation that should be kept.

Some people find it helpful to create a system for their financial transactions using envelopes and lined paper. Transactions can be recorded on sheets of 8 ½” by 11” paper attached to the front of a large clasp envelope with supporting documentation stored inside. This system works well for many writers because it is simple to set up and only requires the purchase of paper and envelopes.

If you prefer computerized bookkeeping, these transactions could be recorded on a spreadsheet and receipts could still be kept in a clasp envelope. Microsoft Excel^®   provides an easy-to-use program which can help organize your records.  Google^® Docs is another option.

If you would like to go a step further, QuickBooks^® is a user-friendly accounting program which generates financial statements and budgets using the data you input. Receipts would still have to be kept to document your transactions. FreshBooks is another program to consider.

The choice is yours. Any system that works for you is acceptable to the Internal Revenue Service as long as the pertinent information is recorded and retained. Learning what to record as writing expenses as well as how to properly document each transaction is important to the success of your writing business.

© Brigitte A. Thompson, Datamaster Accounting Services, LLC

The information provided is intended to be general and based on the Federal Tax laws of the United States. As such, it is subject to change. This information is not intended to be used as a substitute for financial or legal advice.  Be sure to consult your tax advisor on all tax matters.