Quote:
Originally Posted by Joykins
Are you filing Schedule C? There's a place at the end to list expenses that are hard to classify. I've done this in Turbo Tax for years, and if your profit from your sole proprietorship is under about $300 you pay no self-employment tax. Above that you pay the 12%. You use your profit or loss TOTAL from Schedule C in Schedule SE, which includes your (subtracted) expenses. The expenses for postage and office supplies go on line 18 in Schedule C.
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Thanks for this (and to catlady too). This is what I'm TRYING to do, but it doesn't appear to be working. Maybe I'll be able to tell where turbotax is entering the info when I print things out. At this stage, I enter the expenses and turbotax deducts about 5 to 10 percent from the total owed. I thought it would deduct certain expenses entirely (like production costs of the books. Those are flat-out costs against anything I can possibly earn. Same with cover art, editor fees (this one seems to work correctly. I entered it in contractors.)
But again, thanks. I'm going to go get those forms and try it by hand to see what happens. Saying it doesn't make sense ... well, it's the IRS. Of course it doesn't make sense!
Re: Topic at hand. Lots of people live on 25 a year. The trouble is that the VAST majority of authors do NOT make a 25k advance per year. 50k is even more rare (check the blog of Harry Connolly who got about a 75k advance--but didn't earn out. So the series was cancelled.) Writing/publishing for most authors is "supplemental." If I get a 25k advance, and earn out, and publish a book a year, I'm really only likely to be taking home: 17.5k. (15 percent SS and 15 percent Agent, because in deals like that, an agent is usually involved.) Now I've got to repeat that year after year until some of the backlist sales are paid out (6 months to a year after they happen.) Heathcare on 17.5k? I better be careful out there and not get sick. Retirement plan? I better just work until I die.
I'm not complaining, mind you, I'm just saying that the average author isn't even getting a 25k advance and those that do? Well, it might be enough for a family of one or two to scrape by on, but even that is pushing things.