My next free seminar funded by Project Freelance 2017 is “Business of Being a Writer” and it starts at 7PM on Monday, July 17th at Islands Library in Savannah, Georgia. This will be my first-ever event in Georgia. I’ve been in touch with schools and I am waiting for confirmation of a school visit there later this year.
Reminder: Only a few days remain to fully fund Project Freelance. YOU can have an impact with a contribution as little as $5. PLUS – all contributors receive audio recordings of the seminars. So if you like what will be covered below and won’t be able to attend – you’ll still get the recording. CONTRIBUTE HERE
Accounting, career direction, and business formations are often not top of mind when a writer first dips their toes in the freelance waters. Some writers don’t consider these matter until after they amass a few bylines and then decide to jump in and surf the waves of independent life. I often hear from writers who ‘wait-and-see’ if they get a few clips first to learn if freelancing is a viable option. Then when they have a full plate of work, or tax season rolls around, they are too busy or too late to figure out a proper administrative workflow for finances and filing.
I have a few points below from a longer checklist of items that writers should consider and seek professional counsel on before, as they start, and throughout the life of their writing business:
- Accounting mistakes. New freelancers may have deposited income from magazine writing into their personal account. They may have spent 100 percent of their new writing income in celebration. Maybe they kept a pile of receipts for their professional expenses–in good faith for tax time–but did not enter expenses into accounting software for easy review and record keeping. If an individual pursues writing as a business and not a hobby, they should open a separate bank account for all income and expenses related to their writing business activities. Writing income (if it exceeds the annual threshold of $600) is taxable. It’s helpful to set aside a portion of each check for tax purposes. Most accounting software today includes apps, which make taking pictures of receipts (that often fade over time) a breeze for long-term records. Having an administrative plan for your finances will allow you to spend more time doing what writers do: Writing.
- Writing career spinning compass. It took me several years of freelancing to understand the value in specializing. Last year I re-focused my writing business exclusively on law/finance, agriculture/food, and lifestyle/culture. As writers set up their respective businesses for the first time, or change course over the years, having a general idea in which direction you’re headed can help boost your success rate. If you want to be a medical writer, maybe specialize in cardiac care. If food writing interests you, decide whether you want to refine your scope down to vegetarian food writing. Having a clear(er) focus can help editors recognize/remember you, can help you negotiate a higher rate depending on the article topic and market, and can create opportunities for editors to approach you with assignments.
- Writing business structures. For some writers, the decision on which business formation to operate their writing under stops them from moving forward. According to the United States Small Business Administration, “sole proprietorship is the most basic type to establish.” Of course, this comes with many liabilities. Should you incorporate as a freelancer? Depending on the type of work you choose to pursue, your financial and life situations, or other business interests, it may be the better option for you – or far too complicated for what you need. I often recommend checking out Volunteer Lawyers for the Arts, consulting with your accountant/attorney, and taking a business class dedicated to business formations or starting a business.
In my seminar next month, I’ll cover these topics in greater detail and touch on issues that you should ask your tax professional. I’ll bring up examples of business decisions that can affect both current workflow and how writing assets might be handled after one’s death.
NOTE: As is the nature with anything related to tax and law, speak with a Certified Public Accountant or tax attorney for legal advisement specific to your unique situation. Be advised that I am not an expert in the tax field and none of what appears here is intended as legal or financial advice. The information here is provided to help writers consider important matters that may affect their respective writing businesses.