What time? Tax time! I'm working on my taxes, and I have Turbo Tax assisting me in the effort. When Melissa and I were married, she loved doing the taxes. It was a little creepy. Of course, we had a house, a child, and neither of us made much money, so we usually got a decent-sized return... that went back to the house or the child. However, now? I still don't make a lot of money, but last year I owed. I'll probably owe again this year. I started grumbling to April about how I barely make any money and the government still wants more. April has no sympathy, and reminds me that this is the price I pay for wanting the IRS to acknowledge "comic book writer" as my second income. I made more money in 2009 as a comic book writer than ever before. And it looks like I will make even more in 2010. I calculated that I need to make 15x what I made in 2009 to be full time. (Need to get some more comics published.)
I had a question about the sacred 1099MISC form. I received one from D Magazine, but not from some of my other clients. Do you file it as if they did send you one? Otherwise, where do you put this freelance income? I posed the question to my friends on Twitter. I received quite a range of advice, all from experienced freelancers. Most names have been withheld, just because.
"There should be a place to put income that you didn't receive a tax form for. You just enter the amount & the name of the co."
"Yes, if you don't it'll come back to bite you next year. All you need is the amount, their address and tax id."
"Even w/o a 1099, you're SUPPOSED to report any amount over 500. Lots of people don't. Your call really."
"You need to contact the company to request a copy of the 1099. Hope this helps. ^C" (from @TeamTurboTax)
"yes, report the income. I think it goes in as Other Income. Sorry I can't be more specific. Haven't used turbotax in a while"
"the best tax advice i can give you is hire a pro. ill never do turbotax again"
I emailed my clients to see if they should send a 1099MISC. I figured they would know, since they run the business and such. Everyone responded that since it was less than $600 (I'm a cheap date), only income over this amount is reported to the IRS. However, since my total from all clients is more than $600, it seems like I need to report it all. Yes?
I'm calling my dad to ask him. He's an uber-genius business man.
And with Kickstarter, how do I claim the $1,156.83 I raised? Do I claim the pledges as "individual gifts"? You only have to claim gift amounts over $10,000. If I did that, am I still able to deduct the $1,200+ I spent in business expenses to print and ship those comics?
And come on, can you really claim comic books as a business expense?
This doesn't stress me nearly as much as it fascinates me. Don't worry, Mr. IRS-who-is-scanning-the-internet-for-audit-victims. I'll figure it all out.
However, I think I need to do things differently next year. First, I'm reading MY SO-CALLED FREELANCE LIFE by Michelle Goodman. I'm also going to pool some money together with other local comic book creators, and bribe a financial adviser (someone who specializes in creative freelancers?) to offer a full-day workshop to cover all this stuff. I'm sure I can find some people who'd pay to get the money issues straight. And yes, I will probably hire someone next year to do my taxes.
I'm also pondering other ways to raise money beyond the traditional writing, publishing, and selling method. Not ready to share any of those ideas yet. Still pondering.