Monday, July 20, 2009

Writers Overpay On Taxes--Part I

A large number of writers and artists overpay their taxes. Over the years I have seen these clients pay as much as double the amount they should have. As a writer myself, I am dismayed when a new client comes in that has overpaid for years. Writers work hard to turn a dollar and overpaying taxes can devastate a career.

For writers making $5,000 to $30,000 in profit a year, the easiest way to to reduce the tax burden is with a triple-net lease back of your home office. The simplest way to facilitate this tax advantage is to form an LLC as a single member. Then you rent your office from yourself, turning earned income into unearned income and avoiding the 15% self-employment tax.

This works for all small businesses that work out of the home. This low hanging fruit can return over $4,000 per year in tax savings, depending on your personal tax situation.

If you have any questions on setting this up, contact me. My website is:

Tomorrow I will discuss another tax saving strategy for writers with a larger income.

No comments:

Post a Comment