Tony Tulathimutte, a recent Whiting Award winner, posted some dynamite financial advice for writers on Facebook. This came from the Whiting Foundation's financial literacy seminar, and I'm reproducing it here, with some annotations of my own, based on his original Facebook post.
Student loans and other debt
- If you work for a cumulative ten years in government agencies or non-profits (including state schools), your student loans can be completely forgiven through the Public Service Loan Forgiveness Program.
- All debt is negotiable, especially if it's old. Credit card companies and other debt providers can be haggled with. To this I'll add that debt refinancing is a thing and people should take advantage of it. SoFi is a company that refinances student debt. Their repayment plans might not be right for everyone, but it's worth looking into.
Business expenses and tax write-offs for writers
Let me preface this by pointing you to this Writer's Digest article, which talks about when writers can claim business expenses on their taxes. The tl;dr is you can claim them most of the time, even if you're only trying to make money writing, but there's a catch:
Also, it’s important to note that if you claim your writing as a business, the IRS expects you to start making money after a couple of years. So if you’re making minimal money, for tax purposes you may only be able to claim your work as a hobby, which would allow you to deduct expenses only up to the amount of income you’ve made from writing.
And as with any tax advice, take it with a grain of salt and for fucksake, talk to a tax professional before you actually do this. With that, here's Tony's advice. You can claim:
- All books, magazine subscriptions, movie/theater/museum tickets, and anything else you can reasonably claim as research can be deducted.
- If you work form home (for example, if you're freelancing), you can claim a percentage of your phone and internet bill, along with utilities and the rent you pay for the square footage of your office.
- Clothes you buy for a reading or performance.
- Gifts for business associates (like that bottle of wine for your agent)
- Fees from publicists, photographers, or videographers.
- Advertising and promotion (flyers, ad placement, social ad promotion)
- Office supplies and equipment
- Classes for professional development
- Professional organization membership dues
- All travel that isn't your daily commute (like taking the train to another city for a reading or flying to AWP), car mileage, and per diem expenses when traveling on business
- Web hosting and domain registration
- Rented studios or office space
- Large purchases (like a laptop)
The best way to keep track of business expenses is to have a separate credit card that you only use for writing stuff. A comment on Tony's original post recommends you keep any receipt above $75, in case of audit (although it should be noted that audits are rare for people making as little money as most professional writers).
Want to have a 401(k) or a portfolio but don't want to line the pockets of capitalism's slimiest douchebags? The Whiting Foundation recommends looking into ethical investors like Calvert, The Reinvestment Fund, Parnassus Fund, and TIAA-CREF.
Roughing out your yearly expenses
To figure out how much money you'll need to live in a year, add together your rent, utilities, internet, phone, car/transportation fees, groceries, booze, recreation, classes/workshops, entertainment, subscriptions, clothes, books, student loan payments, investment in savings, and health expenses.
Then, to calculate your professional hourly rate, divide annual costs by 1,500. Multiply that by 8 to get your day rate. Multiply your day rate by 5 to get your weekly rate.
Hat tip to Tony Tulathimutte for sharing the Whiting Foundation's sweet sweet money secrets!