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Financial Literacy - Taxes
SPOTLIGHT
Celebrities talk taxes
From actress Lorraine Bracco to actor Steve Schirripa, celebrities have something to say about taxes.
Taxes made easy
 
 Celebrities:
Lorraine Bracco
George Carlin
David Crosby
Eddie Money
Jodi Picoult
John Saul
Steve Schirripa
Celebrity Q&A
Who: Jodi Picoult
Notable:
Author ("The Tenth Circle," "Wonder Woman")
Fame & Fortune Q&A:
Bankrate: Writers face some unusual challenges when it comes to taxes, right?
Jodi Picoult: Oh, you definitely do. Probably one of the biggest financial crises to begin with are taxes, because we're supposed to be psychic and predict what we'll make, and there's no way you can do that, it's just not the nature of royalty checks. So we're constantly on auto-protect and paying ahead of time on speculative taxes basically, on a quarterly basis, and that's really difficult, too. Having a good tax accountant is really important because a lot of normal accountants would have no idea what to do with an author's income.
Bankrate: It sounds as if you might have learned the hard way.
Jodi Picoult: As a young and na´ve author, I had an accountant who thought he was doing the right thing and just the way he filed the tax return was actually not right, given the way the income flowed in, and I wound up having to pay all these taxes and penalties. That was sort of a wake-up call that I needed someone who was aware of my business. That was like my second or third book.
Bankrate: How much did it cost you?
Jodi Picoult: I don't remember. It was a few years after the fact when the IRS caught up with it and said, "Oh, guess what? You screwed up." Then we got socked with a fine. It wasn't a huge amount of money because I wasn't making a huge amount of money at all, but it was still really shocking because I had done the right thing, I went to a professional. And this guy still didn't really get it, and why would he? I mean, how many authors are you going to deal with in the course of your tax career?
The other thing that is really tricky is, my books are published in about 40 countries now and so when we get tax returns and tax income, I think you pay all kinds of foreign exchange rate taxes, all these bizarre things that occur. I can't even think about how fat my tax return is, because it has so many complicated issues. I could never do it myself. I basically take all my stuff, give it to my dad, God bless him, who organizes it, then he in turn passes it to my accountant. I go on tour and I'm gone for like three months, so there has to be a place where I can stop and sign the papers before we send it all out with the check. But I'm not complaining.
Lesson learned: 
Understand the tax laws that apply to your particular job situation.
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-- Posted: Dec. 17, 2007
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