Figuring out deductions

Why am I talking about taxes in the middle of August? We’ve got something like 8 months before we need to think about prepping our taxes, right?

Well, a little work along the way will make it easier to prepare your taxes come April. Personally, I like the idea of just getting the damn things done and over with, as soon as possible. Getting an extension just means I have to worry about it even longer.

One way to simplify things is to keep track of your business expenses now. If you’re using some kind of money management software, great! — your computer may do all the work. If you’re using paper and pencil, you still need to be tracking which of your expenses are deductible.

According to the IRS, “Business expenses are the cost of carrying on a trade or business. These expenses are usually deductible if the business is operated to make a profit.”  I don’t know about you, but I’m planning on making a profit here, if it kills me.

So, let’s take a look at exactly what we can write off.

  • Do you work from home? Well, as long as you own your house, you can write off a certain amount of expenses. Take a look at the IRS’ Publication 587 to determine just how much.
  • If you work from an office you rent, that expense is deductible.
  • Do you use your personal car to make business trips, even down to the post office? You can deduct set amounts depending on mileage. More information is available at the IRS’ Publication 463.
  • You can deduct travel expenses for conventions, and often other expenses as well, although if you take your family along, their expenses are not deductible.
  • You can deduct business assets — such as if you buy a new computer to work on.
  • You can also deduct insurance and retirement expenses — the government pays you to protect yourself!

Basically, all of these deductions boil down to the fact that you can deduct any normal cost of doing business. And you should! The typical freelancer treats her business as a sole proprietorship — the simplest business form there is — and simply files her business income as part of her personal tax return. This means choosing between a standardized deduction of $5,150 (this differs if you’re filing with your spouse or have dependents), or itemizing deductions. It’s good financial sense to take the largest deduction you legitimately can. Otherwise, you’re just giving extra money to the government. 

The Freelance Resume Conundrum

I bet you didn’t even know that there was a freelance resume conundrum, did you? It’s pretty basic – the typical resume format of objective, skills and as much employment history as you can come up with just doesn’t work for freelancers.

Say Betty is a freelancer – she has a regular gig writing for a local magazine, and another one blogging. On top of that, she’s always querying magazines and she has a fair number of clips. Now, in theory, it would be nice if Betty could get jobs based solely on those clips, because your writing abilities should be more important than how long you wrote for Regional Auto Magazine.

But a lot of editors want to see a resume, especially if you’re querying out of the blue. So, how can we give them a resume that doesn’t make us look like flakes that jump from publication to publication?

How about a template better suited to our needs?

  • List your name, email address and phone number.
  • Throw out the objective. If you’ve written an excellent query letter, you shouldn’t need an objective.
  • List publications your material has recently appeared in. A bulleted list should do well here. Think CV here, rather than resume. You can also list projects, such as PR campaigns here.
  • Your skill set should include styles you’re familiar with (AP, Chicago, etc.), topics you can write about effectively and any other related skills.
  • Include relevant work history, but don’t clutter it up. If you were a technical writer in corporate America, include it. If you flipped burgers, don’t.
  • Education is, of course, required. I’d recommend including internships and certifications under education, rather than giving them their own section.
  • You can list any affiliations you hold, such as the Freelancer’s Union or the Association of Women in Communication. It’s not necessary, though.

That sounds a lot less stressful than making Betty wonder if she should include that month she spent as a contractor with the local public relations agency under her work history.*

Make sure that you have good clips to send out with your resume, however. Examples of the excellence of your writing are more valuable than the most polished of resumes.

“Quantum meruit,” in the old tongue

Writing is my livelihood, and probably yours too. I have an expectation that I will receive fair value for my work, but there seem to be a lot of people out there willing to work for peanuts, or even less.*

Herein lies the concept of ‘quantum meruit‘ — reasonable value of services.  I’m mentioning it for more than a simple rant about the low payment offered by some individuals. It’s a very valuable little piece of contract law that might help you out in your many productive years of freelancing.

There are two situations in which the idea of quantum meruit is applicable.

  1. If a person is employed (expressly or implicitly) to work for another without any agreement as to his compensation, the law considers it an implied promise on the employer’s part to pay the worker for his services.
  2. If a worker has a contract with an employer, and the employer halts work, generally the worker is entitled to compensation for the work he has already completed.

Contract law has a few more nuances, and I do recommend that you get some legal advice before threatening to sue a non-paying editor. But there it is — you have a right to be paid, even if you don’t have a contract or a set rate. You also have a right to be paid for killed work, although it is a bit more complicated — since you maybe able to sell a piece to another market, you may not be able to collect any payment.

*Perhaps peanut shells?

Word Count: August 16, 2007

1,494 words feel good, although, unfortunately, it wasn’t a power of 2 like yesterday’s count. Even if I didn’t get any comments over here, apparently all my geeky friends noticed. I feel very validated.

Secrets of a Good Email Address

You’re a professional, skilled and expensive, right? Then why, in the name of your bottom line, is your email address 2cute4words@hotmail.com? Cute just can’t cut it. Use cutesy for your friends and family, if you want. But for those important queries and editor contacts, use something a bit more professional.

What goes into the construction of a good email address?

There are actually multiple schools of thought on the actual name portion of your address. I’ve seen encouragement to include a word or two of what you do — like markthetravelwriter@randomemail.com. Personally, I disagree. First off, it ties you down on what you can do. Think about this: a company needs a brochure written and considers you, but in the end  skips you over because “he must only do travel writing.” Secondly, I don’t think it’s all that professional. I think your name, or some combination of your initials and name are very professional looking, and doesn’t tie you down at all.

The bits after the at sign are just as important as what comes before. Hotmail addresses imply a disposable nature, and to a lesser extent, so do most other free email providers. If you have a personal website,* it’s more than worth your while to use it as part of your email address. I can’t tell you how many times I’ve gotten email addresses and then checked out the associated web page. It’s good marketing sense.

If a personal website isn’t an option, check around to any websites you’re associated with — writers’ groups, etc. A lot of places offer email addresses. Then, we come back to the free, easy to get email addresses. There are hundreds of sites offering free email addresses. And if that’s the best option for you, I won’t argue. I will, however, tell you that I use GMail. It does everything, include sit up and beg. And if they’re still requiring invites, let me know and I’ll send you one. One added benefit of using GMail —  I give out my email address to everyone. No spam has hit my inbox this week. No legitimate emails have gotten classified as spam. It’s a beautiful thing.

*If you don’t, don’t worry. I’ll be yelling about them later. Same Bat channel, same Bat time.