October 21, 2014

Guest Post: The IRS Doesn’t Email and Other Tax Tips for Writers

By Carol Topp

With tax season right around the corner (or upon us) these tax tips from Carol Topp, an author and a CPA, are both useful and timely.

1. The IRS doesn’t email

The IRS does not initiate communication with taxpayers through email. They will only contact you via mail or telephone. Late last year I received an email claiming to be from the IRS stating they were investigating my tax return. I knew it was a scam because the year wasn’t over and my tax return had not been filed yet! If you receive an email claiming to be from the IRS do not reply, click on any links, or open any attachments.

2. Mileage records

I dislike recording my odometer readings, so I use Google maps to calculate mileage instead. Mileage records must be kept contemporaneously, meaning you should not rely on your memory, so I record the destination and mileage in my calendar. The IRS sets the per mile rate and adjusts it annually. For 2012 writers can deduct 55.5 cents per mile.

3. Business use of the home deduction

The business use of the home is a valuable tax deduction for writers, but you must use a specific part of your home only for business. You cannot mix business and personal activities such as letting the kids use your office for homework. For example, my home office is used only for business, but I meet clients at my dining room table which is also used for family meals. I can claim a deduction for my home office but not for the dining room.

4. Tax software can lie to you

“The IRS stopped the home office deduction,” an author told me. I knew that wasn’t correct. She had made a mistake in using the tax software and it failed to include a deduction for business use of the home. If something seems incorrect about your tax preparation software, contact the software provider, or better yet, consult a professional tax preparer. If there was a mistake made on your tax return, you can amend your return up to three years after the due date (plus extensions).

5. New Registered Tax Preparer

All tax preparers are now required to register with the IRS. But not all tax preparers are the same.  Registered tax preparers must pass a competency test and meet continuing education requirements. Tax attorneys, certified public accountants (CPA), and enrolled agents have higher testing and continuing education requirements than registered tax preparers. In addition, CPAs can represent you before the IRS and have ethical standards. They are business advisers, not merely tax preparers.

Carol Topp, CPA is an author and Certified Public Accountant. Her most recent book is Business Tips and Taxes for Writers. If you have a business or tax question, contact Carol at TaxesForWriters.com.