What authors should have in their files.

What should a writer have in his or her files? With tax time here, I thought this might be helpful.

An author should be able to open up his or her files and find a bunch of information. These files are typically stored in a filing cabinet or scanned in to a computer. PLEASE back up your files remotely and don’t trust that your filing cabinet is fire proof. They aren’t. Even my friends with fireproof safes lost everything in their safes during the California wildfires. The fires were hot and the safes weren’t fireproof enough.

Here’s what I suggest you keep in your filing system:

1) Copies of all of your royalty statements and sales figures.

You should be able to pull these out for each book to get an idea of how well your book is doing, and also you need to include sales figures in future proposals. It’s a good idea to create an Excel chart with title, publisher, date of publication, and the most current number of copies sold.

2) Check stubs or deposit slips (for direct deposits) for all royalty and advance checks/payments.

Believe me, you need these for taxes. You will want to check your 1099s against them and you will also need to note any commissions or expenses (like a bank fee or postage charge) listed on the stubs.

3) Copies of contracts and contract addenda.

Make a copy of your contracts for yourself when you sign them and keep them on file for reference.

4) Copies of marketing plans given to you by the publisher.

Check these frequently to see if there’s something you could be doing to help the publisher get the best results from the marketing they’re doing. For instance, if you know the publisher is running an advertisement with your book featured in a magazine or on a website, invite people to check it out on your Facebook page, or Instagram, or blog (or social media of your choice). Even if your fans don’t go look, you’re still obtaining exposure for your book without directly saying, “Go buy my book.”

5) Copies of professional reviews of your books.

These reviews can be included in future proposals and promotions. A quote from a great review might end up on future book covers. Even if a review is really nasty, keep it, maybe in a different file folder. It’s important to look at bad reviews now and again to learn from them, and you never know what they might mean to you 20 years down the road. Maybe you see it as a nasty review now, but give yourself some distance, and it might become more meaningful.

6) Fan letters that were “gems.”

These letters can provide encouragement and laughs. Author Debbie Macomber has some really cute ones that she shares when she speaks at writers’ conferences. Keep some of your own for days of discouragement.

7) Receipts from business expenses and business travel.

These are also important to keep for taxes. If you make any money from writing in a given year, you can write off all of your writing-related expenses. I have also heard you can go for a specified number of years developing your craft and submitting projects without earning any money and still write off expenses from your personal taxes. (Talk to a tax accountant to gather the specifics. I am not a tax expert and rules do change year-to-year.)

8. Copies of your past tax filing documents.

I am not sure what the number of years of taxes you need to keep is. This is another thing to talk with your accountant about.

Did I miss anything? What do you keep in your files?