Writers in the Storm

by Jenny Hansen

Taxes are a bummer for most people, but...we have to do them every year. If you haven’t already filed your 2018 taxes , it’s time to think about them. Before you make squinchy faces at me and say “Boo-hiss…TAXES." *shudder*, consider that some of the changes from the Tax Cuts Jobs Act (TCJA) might offer you more deductions than in previous years.

And I know I lured you in with that "easy" word in the title but, at least for this year, I think everyone should engage the services of solid accountant. Even if you normally do your own tax returns. Things are a little wild this year.

That TCJA has a Section 199A that is being called “the tax cut of the century.” Here’s what it is:

The Section 199A deduction gives sole proprietors, partners in partnerships, some real estate investors, and S corporation shareholders an extra deduction equal to 20% of their business income.

[This is a big deal.]

I had some examples, but Julie Glover told me they made her head hurt so I've moved them to the end of this article.

I work with accountants at my day job and their education time this year was two or three times higher than their norm. Many, many of the deductions have changed. In fact there were updates to this 199A just last week.

My advice: Do yourself a favor and leverage the 2018 tax prep of a good CPA. Be sure you ask them how much education they've had on Section 199A. You don’t want to pay extra or leave a great deduction on the table.

Tax Checklist for Writers

1. Make an appointment with your accountant

When you make that appointment, be sure to also get that tax organizer that makes your eyes cross. It will guide you as you gather documents. Set aside as much time as you need to fill it out.

Or do what I do and get an hour into the process, and start whining until your organized friend or spouse takes pity on you.

2. Gather your receipts and download the bank statements from your personal and business accounts. Put these into a spreadsheet if you can – it’s easier.

3. Make some important decisions

Decide whether you will claim the standard deduction or itemize in 2018. The standard deduction has gone up to $12,000 for single filers and $24,000 for married filing joint. This means many taxpayers will no longer itemize.

Review the changes to itemized deductions in 2018 below:

• Taxes are limited to a $10,000 deduction each year (this doesn’t include taxes related to your business or rental property).
• There’s no deduction for employee business or investment expenses.
• Interest on a home equity loan is only deductible if the loan proceeds were used to buy or improve your home.
• The interest deduction is limited to mortgages of $750,000 (post Tax Cuts and Jobs Act)

4. See if you are eligible for any bigger deductions

• Did you buy a car in 2018? If you use your car for business, this may be a huge deduction the year of the purchase.
• Do you have an education savings account for your child? 529 plans can now pay for elementary and secondary school tuition (limit $10,000 per year).
• Have your estate planning documents been reviewed in the last few years? The annual gift exemption is $15,000 per person in 2018 and 2019 and the estate tax exemption is $11.4 million per person or $22.8 million per couple. This is higher than is used to be.

Put on your Business Hat

Most writers are considered “self-employed” in regards to filing their taxes. In a taxpaying sense, this means that your “business” as a writer, and you as an individual taxpayer, are one and the same. There is no legal separation like there is in a corporation, partnership, LLC, or other legal entity. The writer usually files a “Schedule C” as part of his or her regular 1040 income tax form, which is where you report your writing income and expenses.

What expenses and income?

Thankfully, writers have a large group of basic expenses that easily fit the above criteria: education (classes and conferences), travel (hotel, meals, etc.), vehicle and transportation costs, equipment, supplies, home office expenses, legal and professional fees (includes membership fees to professional writing organizations).

A guide to keep track of income and expenses:

Expense items	Income items
Travel expenses	Sales of your work
Office rental (even home)	Income from rented or leased work
Commissions/payment to managers or employees	Wages/salary for writing (includes stipends, honorarium, speaking fees)
Equipment (computers, books)	Grants, awards, fellowship funds
Auto insurance and repairs	Copyright royalties (published or distributed works)
Supplies and materials	Advance payment for work
Legal and accounting fees or services	Sales taxes
Business and Bank fees
Utilities (ex: phone and Internet)
Equipment rental
Publications, periodicals, research materials
Fees for workshops and seminars
Membership / association dues
Shipping or mailing
Insurance
Advertising
Sales taxes

You should have the following information for each item:

• Date
• Amount
• Buyer
• Reason
  for the income or expense/description
• Check number,
  invoice, tracking number, or indication of other form of payment

The biggest question…

IS your writing a business?

To comply with the IRS, a writer must consider if their writing is a business or a hobby. Writers often have financial losses—expenses that exceed their writing profit, at least for the first several years.

When does the tax code determine your writing is a business as opposed to a hobby? Basically, when you are earning a profit from it.

In my humble opinion, this just means that you should make sure you do a few articles, teach a few classes or some other sort of paid writing activity each year, even if you aren’t selling books.

The IRS looks at whether you make a profit at this business three out of five consecutive years. They’d also like you to be able to answer yes to most of the following criteria (this is from the IRS site):

1. Do you carry on the activity in a business-like manner? (Refrain from sharing that you write in your pajamas. With bedhead.)
2. Does the time and effort you put into the activity indicate you intend to make it profitable?
3. Are you depending on income from the activity for your livelihood? (Try not to laugh if someone asks you this.)
4. Are your losses from the activity due to circumstances beyond your control (i.e normal start-up losses)?
5. Do you change your methods of operation in an attempt to improve profitability? (Just say "yes." After all, sometimes you write at Starbucks in clothes, instead of at home in your pajamas.)
6. Do you have the knowledge needed to carry on the activity as a successful business?
7. Were you successful in making a profit in similar activities in the past? (Yes, I made this kind of money babysitting. In the Eighties.)
8. Does the activity make a profit in some years, and how much?
9. Can you expect to make a future profit from the appreciation of the assets used in the activity?

You may have to prove to the government that you have made a genuine effort to earn a profit, so keep meticulous business-related records. 

Note: I'm terrible at being organized so I simply keep a legal-sized envelope and a receipts folder on my computer. If it is paper, it goes in the envelope. If it's electronic, it goes in the folder. I sort it out at tax time.

If your activity can be classified as a bona fide business, you may be able to deduct the full amount of all your expenses by filing a Schedule C. As rude as it is, tax law stipulates that you can’t use a “hobby” loss to offset your day job income. But as a business, you can deduct a net loss from other income you earn, such as wages and salaries.

Note: This article is not meant to constitute legal or tax advice. All situations are different, and all tax questions should be taken to a professional.

Which tax camp are you in? Done in January or waiting in the April 15th line at the post office? Do you use an accountant or do your own? Share your tax-time woes with us down in the comments!

About Jenny Hansen

Source articles:

• Tax planning: 2018 Year-end Checklist
• Artists to Reap Rewards of Major New Tax Deduction Aimed at “Pass-through” Businesses
• The 2018 Tax Cuts and Jobs Act for Creative People
• Tax Cuts and Jobs Act - Insight and Analysis
• Helpful TCJA Bulletpoint List of Changes
• Tax Reform and Section 199A Deduction
• Latest 199A Update: Update On The Qualified Business Income Deduction For Individuals

Examples of deduction scenarios related to Section 199A are below.

Example 1: 

You earn $100,000 as a sole proprietor. In this case, you potentially get a deduction equal to 20% of the $100,000—or $20,000.

The only rub for the typical taxpayer? The Section 199A deduction can’t exceed 20% of your taxable income.

Example 2:

You earn $100,000 in a sole proprietorship but you use the $24,000 married-filing-jointly standard deduction and shelter $26,000 in a 401(k). In this case, your taxable income equals $50,000. You don’t get a Section 199A deduction equal to 20% of the $100,000 of sole proprietorship profits ($20,000) but instead get a Section 199A deduction equal to 20% of $50,000 ($10,000).

Julie Glover

Two months ago, I went over the basics of the new WordPress update, aka Gutenberg software. Last month, I covered formatting options. Today, let's talk about some features and plugins you might want to use.

Copying & Pasting into WordPress

I always write my posts in the WordPress editor screen, but many bloggers prefer to pen their posts in word processing software, then copy and paste into WordPress. How can you make that happen?

Straight copy and paste. Go grab the whole text from its source (on a PC, you can use Ctrl+A and then Ctrl+C to copy it), then come over to the WordPress editor screen and paste it in (Ctrl+V). Gutenberg will convert it to paragraph blocks, and you can then change any specific block to another format choice if you want, such as Heading.

Using HTML. Some writers save their post as HTML and then paste it into WordPress. If that was your go-to method, you'll notice that you no longer have a visible place where HTML editor is shown—but it's still here!

Up at the top right corner, where you save posts, you'll see three vertical dots.

Clicking there opens up a menu with editor options. You have the Visual Editor, the default view with text, images, and so on. And then there's the Code Editor, which is the HTML Editor. Of course, the next step is clicking that second one, so that the check mark moves to Code Editor.

And when you click that, you open up the HTML editor view, which looks like this:

From here, you can paste in your HTML Code. Then, if you want, switch back over to Visual Editor to see the results.

Fullscreen Mode

Let's go back to those three vertical dots. Another option there you might want to use is the Fullscreen Mode.

Unfortunately, its promise that you can "Work without distraction" seems a bit extreme, since this mode does not address the cat walking across your keyboard, the children yelling for your attention, or spammers calling your phone every five minutes. But it does allow a cleaner look for drafting and editing your post. Namely this:

No top or left menu to contend with—just a simple screen to work from.

Reusable Blocks

I love this feature. Let's say you have a book ad that you often use to entice readers to hop over and purchase your fabulous book. You can save that as a reusable block, which you can then access and drop into any post.

First, you create whatever block you want. In this case, I added an image block and inputted the URL link to the Amazon purchase page in the right-hand side bar. Then click anywhere on the block, which brings up the block menu, and click on the three vertical dots. Among the options there is Add to Reusable Blocks.

Once you click that, you'll be asked what you want to call that block and then you'll save it, thus adding it to your list of Reusable Blocks. Then, the next time you want to use that block again, you simply click on the circled plus sign, click Reusable Blocks, and select the one you want.

WordPress will drop it right into the post for you and will remember your formatting, such as the URL link you added before. You can edit the reusable block if you need to by clicking the block and choosing Edit at the top right.

Plugins with More Block Options

While there are many formatting choices in Gutenberg already, you might want to add a few more for special purposes. For instance, wouldn't it be great to easily add a Preorder or Buy Now button for your book release? How about a profile box to feature the author of a post or the author of a book you're reviewing? Want to insert a Google map so readers can find your next book signing?

Several plugins allow you to do just that—get more block options. I tested several, and these are the ones I found easiest to use.

Atomic Blocks. If you install this plugin, you'll get several more options for block formatting. Here are all the offerings:

Just to highlight a few of these, you could add a Customizable Button after a book cover image to encourage sales:

Or you could highlight the author of a post or an author whose book or resource you're promoting with the Profile feature. (They make it so easy to add the photo and social links.)

And the Post Grid block is really cool if you want to show your most recent posts. Here's just our latest three posts, but you can choose any number you want.

Ultimate Add-ons for Gutenberg Blocks. One thing I like about this plugin is that you can deactivate any of the features you know you won't use. For instance, I deactivated the Restaurant Menu option, since our website will not be serving you a lunch buffet anytime soon.

But there are useful block options, like inserting a Google map. Here's can example showing where you can find the California Dream' Writers Conference, where I'll be presenting a young adult workshop in April.

Next up, the Timeline feature. Surely there are other uses for this, but you could let your readers know when books have been or will be released. (And yes, those are real titles of a novella series coming soon.)

You could also feature reviews left about your book with the Testimonial block.

There are more options with each of those two plugins, and if you choose to add them, play around and see what you like and don't like.

We've thrown a lot at you with this WordPress update / Gutenberg software, so all the information may feel overwhelming. But you won't use all of the options. Just choose what works for you and don't worry about the rest.

With this update, we have a lot of choices available so that we can customize our sites according to our needs and our readers' desires. I'm wishing you all the best in coming up with the best design for your website.

One more time: What questions do you have about the WordPress update? Any features you wish you had but you can't find?

Definite Limits, Approximate Limits, Infinite Limits, and No Limits for Writers

by Fae Rowen

I have to admit that I giggled when I decided to write about limits. I mean, how can a calculus teacher not be excited about getting to blog about limits?

No worries, you won't be getting a math lesson from me today. But I have to admit that I cannot think about limits without mathematical ideas. So here we go with limits—as they apply to writing.

Definite Limit: A definite limit is an exact number, a constant.

In life, we might call it a hard limit or hard line, something you cannot cross.

Like a deadline for taxes or a job application. Or delivering a book to an editor.

In writing, it's the requirements of genre writing, like the HEA in a romance or red herrings in a mystery. Your publisher expects a clean copy of your manuscript, with zero typos and zero grammatical errors. I have a friend who writes for a New York publisher who requires her to have exactly twenty-two chapters in every book. Not twenty-three, not twenty-one.

As writers, we all have our definite limits about certain words we will not put on the page or types of scenes we will not write. These are all non-negotiable.

Approximate Limit: An approximate limit is the limiting factor in a situation. Let's say you are at the fifty-yard line on a football field, pointed toward the goal. For your first play, you run half the distance to the goal line. Your second play you run half the remaining distance to the goal line. You continue running half the distance to the goal line for as long as you're willing to run. Soon, you're within an eyelash of the goal line, but when you take your next move, you will be half the most recent distance to the goal. You will never reach the goal line, although you will be painfully close to it. Your limit is the goal line.

An example of an approximate limit in writing is the page or word count a publishing house requires. Eighty-five thousand words is a target. A little above or a little below is fine. No one expects you to turn in a book with exactly eighty-five thousand words. If you're writing a thriller, your main character encounters danger and suspense close to the first page. Some set-up may be allowed, but your readers must be on the edge of their seats by the end of the first chapter, which becomes your approximate limit.

Infinite limit: A strict mathematical definition of infinite limit is something (a function) increasing, or decreasing, without bound. In other words, something gets bigger and bigger and never levels off or gets smaller. Wouldn't it be nice if your bank account had an infinite upper bound, and just kept getting bigger and bigger, even if by just a small amount? (Note: Technically, an infinite limit means the limits does not exist, however, that is the mathematical purist view.)

As a writer, I think of the emotion in my story as an infinite limit. It doesn't matter what the emotion is—fear, love, or something else—but everything my characters think, do, say or experience should ratchet up that emotion until the end of the book. Readers read fiction to feel emotion, to make a connection. It is my job to take them deeper and farther along that journey to a satisfying ending, so they can continue feeling and thinking about the story after the last word. They may not remember the plot in two years, but if they remember the way they felt during reading the novel and afterward, I've done my job.

When a reader encounters this infinite limit, they tell others about your books, they put your next book on pre-order.

No Limit or A Limit Does Not Exist: This one sounds scary, particularly if you've ever lived with a teen. It simply means that when you approach a problem from two opposite directions, you do not end up at the same place. Yes, it's like your best argument for your teen to do something turned around to come at the issue from the opposite direction and get an entirely different result.

This is frustrating, even dangerous in real life. It's dangerous as a writer, too, because this is the place that readers talk about throwing the book at the wall. Our logic, our genre promise, our characters, must follow rules—either society's, someone they love (or hate or work for) or their own.

Be very careful in no limit territory in your writing.

But in your writing life, remember that there are no limits. None at all. Whether you're just starting out, ready to begin the submitting process, starting publishing, or continuing an established writing career, you are the sculptor of that career. If you need to learn more about the craft, take classes, read articles and books. If you haven't finished a book yet, finish it this year. If you don't know how to market, attend a conference, talk to other authors and learn how to market your work and yourself. If you can't bear to write one more romance and want to ditch your successful career, decide how you can change things up by putting a twist on your romance idea and write that story in a different genre.

The only way you fail as a writer is to quit writing. That's a definite limit.

How can you remove some of the limits you've put on yourself? Do you have someone you can ask for support when necessary?

ABOUT FAE: