Your Zine and the Taxman, cont'd
Save Your Receipts!
Keep records, flyers, receipts, etc. If you can
prove the tour happened, produce phone numbers of promoters,
copies of your zine, etc., you're risk free. You don't need to
have a receipt for every fuckin' thing. At the worst, you'll
have to call some stores and get a written quote or appraisal.
As long as you can produce the equipment you're writing off,
I wouldn't worry. They don't want to have to argue with you!
A lot of you may
be scared of all this, thinking that it's a lot of trouble and
fearing an audit. You're not alone; the IRS intimidates most
people. But if you are reasonable in your figures and fill the
forms out properly, the odds of being contacted by the government
There have been
a lot of changes at the IRS recently. Significant revisions have
occurred in tax laws, but the IRS itself has also been reorganized.
They have been heavily critiqued and restructured by legislature
in recent years, and are attempting to improve their approach
and image with both the public and the media. They want to be
seen as accurate and efficient, not nosy and mean. They have
been drastically downsized in personnel and are moving toward
the electronic/ Internet age (ten years after the rest of us!)
If your figures don't drift beyond the statistical norm for your
business, no one's going to bug you.
The IRS announced
that it's primary focus on fraud in 1997 would be on the Earned
Income Credit, specifically men claiming dependents they have
not claimed in previous years. Remember that their goal is to
void refund checks as quickly and easily as possible. They don't
want to go to court!
It's easy to prove
a child wasn't living with someone, and a lot of people are abusing
the EIC. Keep in mind these are checks for $3656! I'm sorry,
but your $3000 to $6000 loss, giving you an extra $450 to $900
(at 15 percent tax rate) is not worth the IRS's time or money.
If they do check
you out, as long as you don't have a Maserati in the garage you're
fine. They'll see that you aren't hiding vast amounts of money
and leave you alone.
IRS: You can get forms and free information from the IRS's
Request Publication 910 (Guide to Free Tax Services),
a great source of addresses, phone numbers, and explanations
of the different publications and forms available. Another helpful
aide is Publication 334 (Tax Guide For Small Business),
which explains the Schedule C in detail. For information from
the IRS, phone (800) 829-1040. For forms and publications, phone
(800) 829-3676 or download them online.
This may be convenient if you don't have the time or patience
to learn all the information you need. They are very accurate
and confidential, which saves you a lot of worry and headaches.
Most also offer electronic filing, which results in a quicker
acknowledgement and refund from the IRS. The IRS doesn't focus
as much on these returns; they rely on the fact that the paid
preparer completed the forms accurately. Be prepared to spend
$50 to $80 for the preparation. Electronic filing is a little
You can have the
fees taken out of your check at most places, but they're gonna
charge you extra. ($40 to $100) Save yourself some time and call
ahead for an appointment. Three-hour waits are common at the
office I work at!
Find out what information
you'll need: W-2s, identification, etc. A photo ID and Social
Security card are usually a must. Have the totals already prepared
for each of your expenses, tell the preparer that you have the
receipts at home. Its easier on them, and some places charge
extra for adding up receipts. You could also call these places
with specific problems you incur while filling the forms out
yourself, the people are extremely helpful. I work for a chain,
and our office is often called by the central office with oddball
tax questions just to make sure we know our shit. Be firm and
don't let them pressure you into scheduling an appointment, just
ask for answers!
Many colleges and libraries have volunteer tax preparers during
tax season. Most libraries also have forms and government tax
There are many software packages available to make tax preparation
easier. I don't own a computer, so I can't recommend any in particular.
Check it out for yourself, I'm sure they're all pretty helpful.