Tax Tips for Authors: Filling out the Schedule C for Artists, Writers and Performers

Guest Blog Post by: Angela Christina Fyri

The tax Deadline is just around the corner, but don’t panic! Now is a good time to review your record-keeping, for good or ill.

Schedule C

Let’s begin with the familiar form for 1040 filers, the Schedule C. Starting from the top, let’s work through the form together.

Code for Business
At the top of the form is a field requesting the code for your Business. If you are an Independent artist, writer or performer, the code is 711510.

Sole Proprietors will typically use cash basis accounting (recognize income when received, deduct expenses when paid.)

Yes! You materially participated in the business — you are the business.

Income Categories.

Gross income is receipts of cash or value in goods or services. Typically, writers will not need to record returns and allowances nor calculate Cost of Goods Sold. Gross Profit and Gross Income will be the same as Gross Sales.

Expenses. Strive to maintain consistent and accurate (truthful) record keeping. Your records should be for you. Keep it simple. Remember you have the burden of proof. (You must be able to show or to prove entries, deductions and statement made on your tax returns.) This is an important part of proving your business is a business and NOT a hobby.

Reasonable and Necessary Expenses. I use Schedule C’s expense categories. An ordinary expense is one that is common and accepted in your trade or business. A necessary expense is one that is helpful and appropriate for your trade or business.

Completing the Form

• Add all the expenses, subtract from Income = Net Income (Loss)
• Schedule SE , If your income is over $400, estimate your liability immediately! See Schedule SE Instructions
• Good faith estimate of taxes due must be paid by April 16th this year.
• Extension of time to file, Form 4868, USE THIS if you need time to re-verify your circumstances and to make sure you accounted for everything properly. You will be able to postpone FILING your return until August 15th. There is an e-file option including on-line payment of taxes due.

Keeping Records

There are many file systems, bookkeeping and spreadsheet programs that work well. I am a fan of the ‘less is best’ method for most people. Keep in mind, for the process to work, you must develop a routine, and make the filing and organization of your records simple enough for you to be consistent and accurate.

Your ability to organize your records professionally is not dependent upon a computer system. You could maintain a simple logbook or make entries to a spreadsheet to identify income and deductible expenses by type and occasion. File original receipts in an envelope for each typical expense or for each month.