This weekend, we did our taxes. Glargh.
It was tempting to postpone filing them since we've got until May 19th due to our county being one of the ones declared as a federal disaster area from the recent tornadoes, but we (mostly fosteronfilm) went ahead and crunched the numbers and signed the forms, and they're winging their way to the IRS in time to meet the regular deadline.
I continue to be appalled at how much Uncle Sam takes out from my writing income. It's effectively double taxed—at a higher rate, even, which is supposed to make up the difference for Social Security…except I pay Social Security through my day job. Every year at this time I contemplate whether it would be beneficial to incorporate myself, start delving into the labyrinthine forms and regulations to do so, get confounded and flummoxed, and give up. So this year, I've resolved to skip the forms-->frustrated step and go straight to "give up." But I really wish I knew whether it would be worthwhile. 'Course, I could hire a tax lawyer to advise me, but I'm sure that would eat up any possible tax benefit and then some. Sigh.
In other news, while I was updating the Daily Dragon website (details below), I went in and overhauled Hobkin's website, Musta-lay-day Grove, and moved it to my domain server. Comcast, my ISP and the previous host of the site, doesn't give users admin access to the hosting space it provides (did I mention recently how much I hate Comcast?), and I wanted to upgrade Musta-lay-day Grove to a WordPress platform—which requires admin access in order to create a database and DB user. So I decided to make Musta-lay-day Grove a subdirectory of my eugiefoster.com domain.
Now I'm wondering if I want to go ahead and register a domain for Hobkin's website. I even went and checked the availability of mustalayday.com and mustalayday.org (unsurprisingly, both are still up for grabs). It's a silly and tiny hobby site—skunk pictures, a FAQ, and some links—so I'm not sure if I can rationalize the expense. Then again, I've maintained the thing for years, and I kind of like Hobkin having his own web presence. Ponder ponder.
Received my guest acceptance letter from Dragon*Con. I was actually thinking about not applying to be a guest this year. Last year was just so hectic with running the Daily Dragon, I had to cancel out of a lot of my panels (which, among other things, brought on a load of guilt for shirking my responsibility to those track directors) and one of my readings, and I ended up being so overbooked that I enjoyed the convention the least of any year since I started attending it. But in the end, I decided to go ahead and apply.
The thing is, sometimes my panels are the only times I manage to get out of Daily Dragon headquarters, and my guest obligations often help to ground my time sense. Knowing that I have to be at a panel at XX o'clock keeps the days from blurring into convention limbo space-time. Plus, I frequently enjoy doing panels, despite the panic and hyperventilation beforehand. Although I am going to ask the scheduling folks not to slot me for any readings. There's just way too much prep involved, and I intensely dislike doing solo speaking gigs.
On a related Dragon*Con note, the Daily Dragon website moved to a new .org URL from its old .net address, as D*C is doing an across-the-board upgrade to its website server/hosting/etc. I decided that a site overhaul for the Daily Dragon was long overdue, so I migrated it to a PHP platform, specifically WordPress, which should greatly ease DD website updates during the convention. It'll also allow my reporters to get me their articles from anywhere they've got access to the Internet during the convention. Rah.
If you incorporated yourself, you could write off your website AND Hobkin's.
I have some information around here somewhere from Susan Shwartz, who made the benefits of incorporation easier for me to understand. That doesn't mean the forms are easier, but I'll dig up what I can and hopefully it will be helpful.
If you've got anything which would make it easier for me to grasp the benefits (if any) to incorporating myself, I'd really, REALLY appreciate seeing it. Last year I got as far as figuring out how to go about making me an LLC, which is a state form, then I started in on the federal side. Several hours later I was elbow-deep in what seemed to be contradictory tax documentation with a lot of tables and figures, and the only way to get my head to keep from spinning off was to call it quits.
I'm going to check my notes and the email she sent me this evening. It's been three years since I really needed to think about it, so I'm not trusting my memory 100% on what's there. She did recommend someone in NYC- a financial adviser- who often works with authors. (I think he writes, too, or is connected to a publisher.) At the very least, he might know of someone in the Atlanta area who can help you without charging an arm and a leg.
If that's the benefit break even point, it's not exactly a problem here, either. (I wish it were!) Thing is, I've heard contradictory statements on that front, especially with regard to how one incorporates. Unfortunately, all my efforts to make sense of the morass of corporate tax law have ended in dizzying bafflement. Guess that's why the corporate lawyer-folks make gobs o' money while I continue to languish in the Minor Ducats Club.
This meshes with what I've heard and seen as well from a few years back. The big reasons to incorporate are that you need the limited liability protection against creditors and lawsuits, and that you can deduct (some of) the cost of insurance and a pension plan.
So as soon as you want set up that pension plan, it'll be time to incorporate.
You may regret your offer before the convention's over! Mwa ha ha haaa!
Although seriously, doing layout and all, you're already having to work some of the worst shifts. My goal is to keep one of us fresh(ish) during those wee layout hours so we don't let embarrassing oopses make it onto the hard copy. Plus, you're the best layout person I've had EVAH, and I want to encourage you to keep coming back...
I don't have any writing income to speak of yet (though I am hopefully keeping my expenses recorded). However, I actually kind of understand the 'double-tax' situation with sole proprietors. The theory is that the employer would normally pay the other half of the tax, so that as your own employer, you have to pay both taxes. At this point, it's still fiendishly unfair. However, employers know that this is part of the cost of having an employee and this hidden-half acts as a drag on wages. It only feels more unfair, because you can see it. The trick is to make sure that your rates are high enough to pay for this other half - and to make sure to keep track of ALL of your expenses. I often hear people joke about deducting something or another off of their taxes as a business expense, but in reality, it only works for sole proprietors. Feel happy that you're living the American Dream of deducting your writing expenses, business lunches (hint: dragon con may count), travel, etc.
I'm actually quite meticulous (my husband, upon occasion, has described me as "anal") when it comes to keeping track of all my writing income and expenses. And I do deduct everything I possibly can, but it still leaves me feeling pretty shafted.
When I didn't have my day job and was unemployed for something like 18 months—making way, WAY less than the poverty level with my meager freelance writing income—I was still being taxed at something like 28%. If I'd made that much (or rather, little) income as an employee for McBurger Queen, I wouldn't have had to pay taxes that year because of how little I made, but as a self-employed, starving writer, there was no "poverty level" mitigation. Self-employed taxes are calculated separately, and the total annual income amount isn't included in the calculation. It blows major goat chunks.
I *love* Hobkin's website!! He is just too adorable. Lucky, lucky you. AND lucky Hobkin!
Have you checked out SCORE, the Service Corps of Retired Executives? You reach them via the SBA, I think, and if they agree to help you, a local retired business person will help you with getting your business set up, etc. I don't know your business details, but it might be worth contacting them to see what assistance they can give you with figuring all that out.