Dear Reader People,
This post may bore you. We’re sorry. The female likes to help other authors, and it’s that time of year. So, if you’re not interested in the inner workings of Author Land, run away! Ruuuuuun~ Otherwise, stick around, we’ll try not to scare you too much.
Taxes suck, so we’re going to simplify the suckage of taxes for the self-employed author types as much as we can. Money when you get it is when it is counted. Money when you spend it is when it is counted. Money you spend, for business purposes, is something you can probably deduct. There are different categories, including contract labor, advertising, hardware/software, and so on. Track what you spend and its category. You’ll thank yourself later.
We’re paid royalties, and we receive the royalties we earn several months after we earn them. (For example, the money my human earned in January won’t reach her bank account until the end of March. (So my female uses the money earned in January as her April budget.)
Yeah. That’s confusing. And kinda terrifying, especially if you’re just starting out and need the money you earned to reinvest, as you have to wait. Yicky yucky.
Now, for the meat of this thing. It’s basically impossible to get a straight answer out of anyone for anything regarding actual income numbers. Well, here are my human’s numbers for the 2018 tax season.
Note: this is ALL income sources for the female, including the kickstarter she did, whenever she works for another author as an assistant, editor, or what-have-you, and anything else she earns on the side to float the boat.
She does stuff on the side as much as she can, even when it means she works 15 hours a day to do it. She’s really hoping she can relax her schedule soon, though. It’d be nice if, when she comes back from vacation, she’s not working 12-15 hours a day.
It’s tiring on the human, and it makes her sick. But she doesn’t want to go get ‘a real job’ so she does what she must.
These numbers may help illustrate things.
January 2018: She received $5,598 and spent $4,096 for $1,502 in profit. $1,312 was spent in advertising. She earned $5,944 in January. (She was supposed to pay $2,293 in taxes. Didn’t happen. It went to bills. Oops.)
February 2018: She received $8,020 and spent $4,545 for $3,475 in profit. $1,151 was spent in advertising. She earned $7,271 in February. $3,208 was supposed to go to taxes. Didn’t happen. It went to bills. Oops. Again.) (There’s a trend going on here…)
March 2018: She received $5,944 and spent $1,242 for $4,702 in profit. $1,151 was spent in advertising. She earned $11,275 in March. ($2,377 was supposed to go to taxes…)
April 2018: She received $7,271 and spent $3,615 for $3,656 in profit. $1,088 was spent in advertising. She earned $11,640 in April. ($2,908 was supposed to go to taxes…)
May 2018: She received $11,275 and spent $6,615 for $4,660 in profit. $6,019 was spent in advertising. She earned $14,915 in May. (HEEEEYYY… the human put like $2,000 into taxes and opened her tax account because she could! Of course, she was supposed to put in $4,510…)
June 2018: She received $11,640 and spent $10,635 for $1,005 in profit. $0 was spent in advertising. She earned $11,001 in June. All the profit went to bills, and everything was sadness.
The female is curled in the fetal position sobbing.
July 2018: She received $14,915 and spent $7,020 for $7,896 in profit. $1,625 was spent in advertising. She earned $10,027 in July. Everything but the absolute minimum went to the tax account.
August 2018: She received $11,001 and spent $2,847 for $8,154 in profit. $1,589 was spent in advertising. She earned $10,027 in August. Everything but the absolute minimum went to the tax account.
September 2018: She received $10,027 and spent $13,310 for $-3,282 in losses. $8,587 was spent in advertising. She earned $27,700 in September. The humans did terrible things to the savings account this month. (It’s okay. The female was told to spend over this month! The male wasn’t upset at her because she did good on the earnings thing. Don’t panic.)
October 2018: She received $11,911 and spent $6,577 for $5,334 in profit. $1,109 was spent in advertising. She earned $24,736 in October. Everything but the bare minimum went to taxes.
November 2018: She received $27,700 and spent $9,267 for $18,433 in profit. $226 was spent in advertising. She earned ~$17,000 in November. More everything but the bare minimum went to taxes.
Just for the record, every penny of profit from November was eaten by the tax account. The same applied for December, August, and July.
December 2018: She received $24,736 and spent $15,671 for $9,065 in profit. $12,943 was spent in advertising. She earned $13,600 in December. Same old story about the taxes. I was adopted this month, so this was a good month, but no one else in the household agrees with me.
The Tax Account Ate $44,000. (Less than it was supposed to.)
Please note that the ‘in profit’ number must pay rent, food, bills, and the taxes. And the female did not do very good at helping to pay the rent, food, bills, etc until January 2019.
Then her moment of glory cameeeeeeee. (She paid off/saved money for the trip to England.)
January 2019 and moving forward is the set 40% to household, 40% to taxes, and 20% to investments rule, and it works like this:
In January 2019, the female received $24,664.71. $9,865.88 immediately went to the tax account. OMNOMNOMNOM. Then $9,865.88 was devoured by her trip to England, paying the rent, paying the bills, more bills, paying off Christmas presents, and then everyone wondered where all the money went because it’s all gone? (Hint: she was catching up because of the tax account needing a LOT of love because of earning a lot more money than expected in the later half of the year.)
Stupid bills. Stupid taxes. (We don’t discuss the vet bills from December. The humans still cry.)
But England will be totally amazing, and the female hasn’t been on an actual vacation in like seven years. She went away for a weekend in January, but… she worked the entire time expect for the show and when she was glued to the window staring at the ocean.
P.S.: The female now owns a ski jacket because she had no coat at all and there is snow in England in the winter.
$4,932.94 went to investments in January. She actually spent $4,942.76 but the husband looked the other way because ‘it was close enough.’
The female made $25,211.00 in January. Hooray! The earnings, sadly, didn’t come where she was hoping it would considering the $10,000 investment in the last weekend of December, but she made back her money… mostly. She didn’t really make profit on that money spent, because the investment dollars went one very specific place and that series did not fly like she’d been hoping… but other books grew some wings and did unexpected things, and that’s all right. (She wasn’t able to spend too much on advertising in January because she had other expenses (editorial bills especially) she had to pay for first. And there wasn’t much left over.
Books. They’re expensive.
But the unexpected books that did well pulled the weight when the Mag Rom Coms flopped, so that’s a good thing.
February’s earnings aren’t looking good, as there won’t be a new release until the end of the month, which will hurt down the road when she wants to invest in things and can’t. This is expected. March will hurt, too… but she should be able to pay her share of the bills. Or so we hope.
The humans live in a really expensive area, and that’s scary sometimes.
But she’s hanging in there, and she’s now able to contribute to the household, the tax account isn’t rearing its evil head and devouring her soul, and 2019 is looking to be a bright year with a lot of new adventures to go on despite having some bumps and hiccups along the way.
And that’s the story of one author’s struggle to be able to help pay the bills, the rent, and go on a real week+ vacation for the third time in her adult life. (Weekend outings don’t count.)
P.S.: Please forgive the Furred & Finned Management if there are any mathematical mistakes. We tried, but math is hard for us kitties.