Home Writing Business: Build the Spreadsheets Needed for Taxes

Since I started my writing business seven years ago, I've tracked data that my husband and I need to file our year-end and quarterly taxes. Before you start your writing business, you should apply for a business license with your state authority. A business license is essential for paying your sales taxes and for receiving discounts on your business related expenses. In addition, if you move around the state making sales, you may owe sales taxes to the city or county in which you made the sale, and / or to your city of residence.

I use a spreadsheet created in MS Excel to manage most of the data. The reason for this is spreadsheets have the ability to add functions to the columns that will add up the data and I don't have to do it. They are also convenient to enter data. You type the data for a column and hit tab to go to the next column. These spreadsheets are stored in a folder created just for that year. Every year, I copy the previous year's folder and contents and delete out the old data.

I save all my receipts in a folder in my file cabinet titled taxes. I pay for as many of my expenses with a credit card because I then have a direct trace from the bill to an expense item entry in my table. I also put any payment notices made to PayPal in the same folder.

Tracking Your Mileage

Your mileage to and from business related events is deductible on Schedule C of your taxes. Only count trips where you drove. Only count the portion of your trip that was required to get you to your business-related event. Examples of writing events include: classes, critique sessions, brainstorming sessions, conferences, readings or presentations.

The information I track is what we used to put in a form at the Boeing Company and Port of Seattle and includes:

Purpose of Event

Date

Number of Miles

Whether the Number of Miles was for a One or Two Way Trip

At the bottom of the spreadsheet, in the number of miles column, I put in a summation function, in MS Excel Edit> Insert> Function> Sum