Monday, March 21, 2011

It's tax time: Can I get a stimulus package?

I’ve always enjoyed doing my taxes.

I know that’s like admitting I enjoy rubbing my chest with peanut butter and inviting the dog to lick it off, but it’s true. The tax part, not the dog thing.

Well, the tax thing used to be true.

When I sat down to do my taxes Saturday afternoon, it became clear things aren’t as simple as they were last year.

I’ve used Turbo Tax for about ten years, and I’ve always regarded it like a cross between a video game and a really weird Cosmo quiz.

Did you earn this income while an inmate at a penal institution?

I can’t tell you how much I want to check that box (and also how much I love the word penal).

But this year…well, things aren’t as simple.

While I’m thrilled to have income to report from my three-book deal, it complicates things. Ditto that for expenses like conferences, membership fees, and the costs involved with research. Do I get to write off wine tastings at vineyards I visited while learning about the wine industry for LET IT BREATHE? What about the wine I drank while writing the first love scene? Or the second one? Or...

As I cranked away at the computer over the weekend, my pets got in on the action. Matt the Cat crawled across my keyboard and Turbo Tax reported my tax bill had just been reduced by $200.

I tried to get him to do it again, but by then he was lying on a giant pile of receipts focusing on paperwork reduction. Every time he twitched his tail, another form hit the floor.

When the pile got big enough, Blue Cat moseyed along and offered his services as a paperweight.
The dog did her part by dragging her leash over and giving me the look that says, “are we going for a walk or am I going to have to chew your ear off while you sleep?

So we went to the dog park and I spent the time mulling whether this should be the year I throw all this paperwork in a box and either light it on fire or hand it off to someone who actually knows what they’re doing.

How do you handle taxes? Do you use a professional or hack it on your own? If you’re published or pursuing publication, do you have a system for writing-related write-offs? Please share!

The dog and I will be busy discussing whether we can deduct peanut butter as a business expense.


Cat Lavoie said...

Your cats are sooo cute! My Abbie helped out during tax season too... by knocking a big pile of receipts over to help with the sorting process! ;)

Sarah W said...

Every year, my husband and I try to make enough money so we can pay H&R Block to do our taxes.

So far, so good.

Ricky Bush said...

I do suppose that you're claiming that your pets are classified as contract laborers.

Anonymous said...

I make Sweet Babou do it ... but, I always act like I am willing too so he thinks there is a snowballs chance in hell that I could.

Linda G. said...

We just do it ourselves with Turbo Tax. Hasn't been a problem yet, but I guess next year I'll be in the same spot you are. Which is when I'll probably be calling you and saying, "Oh, Taaaawna...what did you figure out about those write-offs?" ;)

Summer Frey said...

When my husband was self-employed and working 1099 contracting jobs, we absolutely had someone do it for us--and NOT H&R Block. They've been nothing but crap for us. We use an accountant whose younger brother went to high school with my husband, etc etc, and he has saved us TONS of money. The first year, we went from owning about $1500 to getting back several hundred. He added up everything from lunch receipts (potential clients!) to the square footage of our office space.

So, yeah. I would definitely advise finding a tax preparer, but probably not one of the chains...

Matthew MacNish said...

I too have used TurboTax for years, and it has always treated me relatively well, even if getting cheesier each year.

This year sucked though. I made just too much to get my EIC, and then they tried to send me my return on a prepaid visa. No thank you. I elected a direct deposit, please do as I asked.

I can't imagine doing it if I had independent income like yours. I would probably have to get an accountant at that point.

Anonymous said...

Oh my word...I tried doing my own taxes a couple times and 'bout had a stroke. I so can NOT figure that junk out.

I started an LLC for my writing and hired a CPA to take care of it. I'd rather spend my time writing than trying to figure out number.

I just keep record of my income and expenses, keep very single receipt and let the CPA figure it all out.

Seriously. If I can pound out about 1,000 words and hour, and it would take me HOURS AND HOURS to figure out taxes and junk....I'd rather get several thousand words closer to the end of my next novel. :)

Anonymous said...

It's penal. Not penile, penal. Different. ;)

Deborah Small said...

I use a tax software program. But then, I'm not self-employed - it's easy when you plug in the info from the employer's T-4...not so when you have decipher gazillions of receipts and tax rules.

You have my sympathy. Good luck.


Trisha Leigh said...

Well, you know my day job is actually for that tiny little government tax administration...and here's my advice. I'm a total advocate for doing taxes yourself - if they're simple. If you are self-employed, it's usually worth it to hand the task off to someone who understands how to make sure you only have to pay one arm and a leg and not two. Because, you know. You need some fingers to type :)

The Novel Road said...

I've used for years. No software to buy and they archive your returns so you can call it up when you need it, anytime, anywhere. Costs $10 and has super deduction finders.
I would like to borrow your cat though. An extra $200? I wonder what would happen with a little cat nip?

Kate Avery Ellison said...

We use an accountant and we love him. He does a great job. He finds all kinds of things that I'd never think of to deduct. We always get tons of money back.

PS My cat Gizmo looks exactly like Matt the Cat!

Steph Schmidt said...

I'm weak. After watching my roommate do her taxes for the first time solo last year, and nearly pulling her hair out I didn't even try this year when I actually had to file. Research grants are a weird gray area in terms of who has to pay the taxes on it. I ended up paying my parent's accountant. He was so nice about it (helps that he's in the family too).

Number crunching and knowing what I can write off is beyond me. It was money well spent to not deal with that headache.

Jason said...

I did my taxes myself up until I started getting a 1099 for contract writing jobs. Since then, with the addition of home office deductions and things like that, I just take the notes, organize things the end of February, and give it all to a pro.

I suppose I might figure it out on my own, given infinite free time and the ability to focus, but probably not.

Still drives me insane I have to pay a Tri-Met tax (for those outside of Oregon, Tri-Met runs the buses and light rail in the Portland area and is a pseudo-government agency) on this money I make. Normally I don't spend that much time thinking about taxes paid for services I don't use, but this is a special separate tax paid direct to Tri-Met, in addition to the state and federal. And I always have to write that check. Makes me angry every year. :)

Nick said...

Love the part about your cat walking across the keyboard! MY blog is in fact called "Cat Get Off My Keyboard"

Michelle Miller said...

I've always done my own taxes as well,but seeing the headache I got just adding Oldest Kid's college expenses this year, I think I can safely say writing income (when I get some) will necessitate the hiring of a pro. It's better than an audit. Or being ripped off for many, many dollars.

Susan Flett Swiderski said...

My hubby does our taxes, and for at least the past ten years, has used Turbotax. We knew we'd have to pay taxes this year on the money I'd received from a magazine, but we also had to pay an additional fee for a self-employment license. Not a deal if you only make a couple thousand dollars, but if I were you, Tawna, I'd use some of that money you earned from your books to let a pro handle the taxes. Too much of a hassle, and we all want you to use your time to keep cranking out the books!

Christina Auret said...

As far as I can tell South African taxes are a lot simpler than American ones. Especially if you have a single source of income (read: the day job).

SARS fully supports e-filing. The system automatically attaches the report your employer files on your monthly auto deducted taxes and there is a 3 page form you fill out for any possible deductions. All of this can be done online.

So all in all my taxes take me half an hour once a year.