Here’s a complete transcript of today’s WordCount Last Wednesday chat on tax tips for freelancers.
Mark your calendar’s for next month’s chat, which takes place Wednesday, April 24, at 10 a.m. PT/1 p.m. ET. The topic: common grammar problems and how to fix them.
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I’m your host, @MichelleRafter, a Portland, Ore., business journalist and blogger at http://t.co/ABbXKQ6Z9T. #wclw
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We’ll spend the next hour sharing tax tips for freelancers – good subject since April 15 is less than a month away. #wclw
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If you’re here for the first time, consider using @TweetChat, which auto adds the hashtag and screens out other tweets. #wclw
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If you’re joining us, please share your name, city and what kind of writing or freelancing you do. #wclw
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For the chat, we’ll start with pre-set questions then wrap up with other questions, tips or advice you want to share. #wclw
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.@MichelleRafter Thanks for holding today’s #wclw chat on tax tips for freelancers! I’m a medical an travel writer in western Arkansas.
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Let’s jump into the questions to get things going. Q1: What freelance-related business expenses do you take? #wclw
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Q1: Professional association dues, pro services like transcription, proofreading & tax prep, transit to conferences & pro events. #wclw
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Q1: I take the following Schedule C deductions: biz cell phone, dues & subscriptions, books & periodicals, computer & software (more) #wclw
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Q1: Other Sched C biz deductions: , Internet, office supplies, travel, meals & parking in town, professional services, postage, misc. #wclw
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@UrbanMuseWriter Starting in 2012, IRS allows for deducting biz cellphone without having to to itemize calls etc., so I’m taking it #wclw
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Q1: I do the same except that my accountant said only a % of internet costs. But otherwise org. dues, mags & books, supplies, etc. #WCLW
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@MichelleRafter You probably know about the simplified home office deduction option for 2013: http://t.co/Qc5IFEtqrC #wclw
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RT @byJenAMiller: #wclw is happening right now and allllll about taxes for freelancers #freelancemafia #wclw
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Yes! RT @UrbanMuseWriter: You probably know about simplified home office deduction option for 2013: http://t.co/OkDZJSvV04 #wclw
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I didn’t know this – thanks for sharing! MT: @MichelleRafter Starting in 2012, IRS allows deducting biz cellphone w/out itemizing #wclw
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Works for utilities (gas, electric, etc.) too RT @UrbanMuseWriter: @DeborahBrauser I do a % of my internet bill as well. #wclw
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@DeborahBrauser The internet deduction is further complicated by the fact that I pay for TV but don’t use it (it was cheaper that way) #wclw
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Q1: If you use an accountant, HR Block, TurboTax or some other agent or software for tax prep you can deduct that as well. #wclw
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@MichelleRafter I mainly use @GoogleVoice for business, which is currently free so no deduction. #wclw
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Q1: And don’t forget to deduct for any business-related insurance coverage; i.e., media perils insurance #wclw
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RT @UrbanMuseWriter: @MichelleRafter I mainly use @GoogleVoice for business, which is currently free so no deduction. #wclw
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@DeborahBrauser By some bizarre logic, internet + cable was cheaper than just internet. Go figure. #wclw
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Q1: You can claim mileage on Sched C for driving to & from interviews. For 2012, the rate, IRS allowable rate is 55.5 cents a mile #wclw
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MT @MichelleRafter You can claim mileage on Sched C 4 driving 2 & from interviews. 2012 IRS allowable rate is 55.5 cents/mile #wclw #wclw
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@MichelleRafter #wclw — how to write off the home office — I only use it to write, it is a designated room, & I write full time.
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@UrbanMuseWriter My internet + cable + land line all tied together, so mine’s also complicated! I’d like to drop phone but pricey. #wclw
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RT @MichelleRafter: Next question — Q2: What freelance-related business expenses are you not sure about? #wclw
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Q2: I know about the home office deduction, but what about “only for work” storage areas such as closets or portions of garages? #wclw
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@MichelleRafter Oh, I’m scrolling down — see you answered it already. Sorry! #wclw — will follow that link.
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@DevonEllington Using dedicated space @ home for writing-work is good. But you can also calculate % of a room for tax purposes too. #wclw
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Q2: I also wonder about backing up a home office deduction in an audit if you move. Would photos and/or a floor plan suffice? #wclw
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Sounds like a Q for your accountant MT @DeborahBrauser What about “only for work” storage areas, e.g., closets or portions of garages? #wclw
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@UrbanMuseWriter I have a photo record, no floor plan though\n\n #wclw
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Yes! Please join us. RT @Meena_Thiru: Seems to be a good tax chat going on for freelancers right now. #wclw
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@UrbanMuseWriter Q2: Seems like taking photos or video to back up home office claim for an audit is a good idea. #wclw
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Thanks Katie, appreciate it. RT @_katie_lane: Follow #wclw right now for helpful info on taxes as a freelancer in the US. #wclw
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Agreed! RT @MichelleRafter Q2: Seems like taking photos or video to back up home office claim for an audit is a good idea. #wclw
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@MichelleRafter #wclw I sent a photo the first time I used the deduction form & they said, “very nice, but we don’t need the visual.” 😉
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@MichelleRafter Just having to head out the door (!), but looking forward to catching up with the hashtag. #wclw
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I simplify tracking deductions w/ folders in Gmail. Each time I order something online, the receipt goes into that year’s folder. #wclw
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MT @TeamTurboTax Hi! You can learn more about other misc. deductions besides tax prep fees here: http://t.co/uc6rcEEohP ^CMT #wclw
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@DevonEllington Good for you for documenting in case of an audit, though! Hopefully you’ll never need that visual. #wclw
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For instance, when I order ink cartridges or register for a conference. Deductible expenses like that. #wclw
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Would be goo in an audit RT @DevonEllington I sent a photo first time I used deduction form & they said, “..we don’t need the visual.” #wclw
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Seems like good time to jump to next question — Q3: What do you use to track freelance income and expense for tax purposes?\n #wclw
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.@UrbanMuseWriter I do that too! MT: @UrbanMuseWriter I simplify tracking deductions w/ yearly folders for receipts in Gmail. #wclw
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Q3: I use an Excel spreadsheet to track freelance deadlines & income. Sometimes it gets wonky so I may upgrade one of these days. #wclw
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What about milage tracking, does anyone have anything more handy than doing it manually? (Yes, that’s me) #wclw
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Q3: I’m old school. I dump paper receipts in folder all year and sort at tax time. File electronic receipts in similar folder. #wclw
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Q3: Ledger book to track income; save paper receipts in categories (do them every week), then tote them up. #wclw
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Q3: I use Word table to track income & compare w/1099s. Also started using Excel spreadsheet for year-to-year income comparisons #wclw
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Anybody? RT @SwansonWriting: What about milage tracking, does anyone have anything more handy than doing it manually? (Yes, thats me) #wclw
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.@MichelleRafter I also dump paper receipts into folders all year long and then sort at tax time. I keept thinking must be better way! #wclw
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Q3: I once used a Google doc so I could access it from anywhere but Google suspended access to my account so no more. #wclw
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RT @DevonEllington: Q3: Ledger book to track income; save paper receipts in categories (do them every week), then tote them up. #wclw
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@SwansonWriting I read a NYT piece about smartphone apps that can do this for you but I couldn’t find the link. #wclw
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#wclw RE: Mileage Tracking — I keep a notebook in the glove compartment. For current play, created sheets for actors to track their miles.
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I did an article in 2012 on smartphone apps for tracking deductible expenses: http://t.co/zOfqR0kH03 #wclw
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Q3: I use Quicken for household, biz finances, then run year-end Tax Schedule reports & I match those against receipts. #wclw
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Q3: Once I’ve got biz income and expenses organized, hand it to my in-house tax guy (my wonderful husband) who inputs it into TurboTax #wclw
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@SwansonWriting One mileage tracking app even synched up w/ Google Calendars to estimate mileage! Pretty cool but not 100% accurate. #wclw
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Q3: We put all tax info in TurboTax but then send everything to an accountant & he goes over everything again & files for us. #wclw
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Good info RT @UrbanMuseWriter: I did an article in 2012 on smartphone apps for tracking deductible expenses: http://t.co/6hSHIbo6rM #wclw
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Sounds like a good system to avoid errors RT @MichelleRafter We put all tax info in TurboTax & send everything to an accountant #wclw
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That’s what I need RT @UrbanMuseWriter: @SwansonWriting One mileage tracking app even synched up w/ Google Calendars to #wclw
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Thanks for sharing! MT: @UrbanMuseWriter I did an article in 2012 on smartphone apps for tracking expenses: http://t.co/Jbnlv10Cfg #wclw
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@UrbanMuseWriter We have a complicated return because of deductions, dependents, investments, etc., so it works out best this way. #wclw
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Found the mileage-tracking app that syncs w/ Google Calendars! http://t.co/93fQnKQedf via @NYTimes #wclw
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Q4 I don’t use software for taxes. My life doesn’t fit in the little boxes. I haven’t found a workable one. #wclw
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Q4: I use an accountant & I think it’s money well spent because it’s outside my core skillset. #wclw
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@cwachlin @_katie_lane @UrbanMuseWriter Feel free to join in, ask your burning tax questions. We’re here for another 20 min. #wclw
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RT @UrbanMuseWriter: Found the mileage-tracking app that syncs w/ Google Calendars! http://t.co/z64TLz9EPB via @NYTimes #wclw
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Agree RT @UrbanMuseWriter: Q4: I use an accountant & I think its money well spent because its outside my core skillset. #wclw
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Thanks! RT @MichelleRafter:Found the mileage-tracking app that syncs w/ Google Calendars! http://t.co/oWUGE8bUMt via @NYTimes #wclw
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Q4: The other advantage to using an accountant is s/he can coordinate w/ your financial advisor for long term planning. #wclw
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Q4: I used Turbo Tax this year. My return is pretty straightforward. My old accountant seemed pricier than most. #wclw
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Definitely not too late. We’re on Q4 from this list: http://t.co/9yKf4myUqD RT @JMasonWriter: Too late to join in? #wclw
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MT @UrbanMuseWriter: Q4: Other advantage to using accountant is s/he can coordinate w/ your financial advisor for long term planning. #wclw
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Q4: Related question — if you use an accountant, do you consult them during year on anything other than prepping your return? #wclw
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When I had an accountant, I asked her some questions during the year. Especially when I was selling my house in 2011 #wclw
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@MichelleRafter I am Tina Armstrong, a multimedia journalist and blogger,based in Lagos Nigeria. #wclw
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RT @JMasonWriter: When I had an accountant, I asked her some questions during the year. Especially when I was selling my house in 2011 #wclw
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In MA, we get taxed for not having health insurance so I wanted to make sure I had the right insurance & handled my SEP IRA correctly. #wclw
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On anything specific? RT @UrbanMuseWriter: Q4: Yes, I email my accountant w/ 1 or 2 Qs during the year. #wclw
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@Ogaugust451 Welcome! We have about 15 min. left in the chat, glad you could join us! We’re talking about taxes. #wclw
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@UrbanMuseWriter I always ask my accountant about SEP-IRA contributions so I’m putting in right amount #wclw
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Also, if I got any gigs that were W2 instead of 1099 & had withholding, I might check w/ him on the correct # of exemptions. #wclw
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@MichelleRafter He offered me three possible scenarios for SEP contributions & suggested monthly instead of annual contributions. #wclw
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Q5: We’ve used the same accountant for years, my husband’s a lawyer & our accountant works with lots of lawyers & other self-employeds #wclw
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@UrbanMuseWriter Monthly SEP contributions sounds a lot better than taking a big hit once a year #wclw
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Sounds smart. RT @UrbanMuseWriter: Q5: My accountant was a referral from my financial adviser so they coordinate together. #wclw
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I’m curious if any self-employed writers have had to collect sales tax on their services or products like ebooks? #wclw
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@MichelleRafter In Nigeria, it is not easy to be a freelance journalist.People prefer journalist that are working wit known media org #wclw
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Q5: @FreelancersU has links to NY, NJ area accountants who work with writers: https://t.co/KoGwsA0xKc #wclw
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@MichelleRafter I’m mulling monthly vs. annual bc of the erratic cash flow from some clients but monthly offers $ cost averaging. #wclw
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@Ogaugust451 It would be lovely to learn about working conditions for freelancers in different places – maybe topic for future chat? #wclw
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Anyone? RT @UrbanMuseWriter: Im curious if self-employed writers have had to collect sales tax on services or products like ebooks? #wclw
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@MichelleRafter @Ogaugust451 Regarding writers in other countries, you might also talk to @WriterAbroad @mridukhullar #wclw
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i need better records/invoice system RT @MichelleRafter: Q6: tax prep season to analyze your freelance business, what do you learn? #wclw
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Q6: In the past, I’ve not kept track of little expenses bc of the hassle but they do add up! #wclw
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She’s writing a guest post for me next month, I’ll ask about this RT @UrbanMuseWriter: ….you might also talk to @mridukhullar #wclw
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Q6: My accountant encouraged me to keep track of those little expenses so I can deduct them & lower my tax burden #wclw
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.@MichelleRafter Q6: That I need to make adjustments on future quarterly payments! But also I need to start making monthly evaluations #wclw
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Q6: For 2012, I learned my biggest two clients accounted for more of my income than I realized, hoping to even things out more in ’13 #wclw
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Q6: I also used to worry that taking lots of deductions would flag me for an audit but my income to deduction ratio is still very low #wclw
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MT @DeborahBrauser: Q6: That I need to make adjustments on future quarterly payments! But also I need to make monthly evaluations #wclw
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@SwansonWriting Thanks for joining us. Let me know what other freelance-related topics you’d be interested in for future chats. #wclw
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@MichelleRafter I’m in the opposite boat w/ too many different clients creating admin headaches. Need to be more focused/streamlined #wclw
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@UrbanMuseWriter That’s a great thing about freelancing, overhead is nominal, esp. with regular gigs=not spending much on marketing. #wclw
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@UrbanMuseWriter In the past 3-4 years, I don’t think I’ve had more than 10 clients/year and most often 6-8. Just how I like it. #wclw
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@MichelleRafter I get lots of clients through referrals but if they’re one-offs it’s not very efficient to learn style & pay process #wclw
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That’s it for today’s chat. For more freelance tax tips, see June Walker’s new e-book, The Confident Indie: http://t.co/kSIGHSa8xy #wclw
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The next WordCount writer chat is Wednesday, April 24 @ 10 am PT. The topic: common grammar problems and how to fix them. #wclw
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Until next time, read more on freelancing, writing and media industry trends on http://t.co/ABbXKQ6Z9T. #wclw
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RT @MichelleRafter: Until next time, read more on freelancing, writing and media industry trends on http://t.co/ABbXKQ6Z9T. #wclw
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RT @MichelleRafter: For more freelance tax tips, see June Walker’s new e-book, The Confident Indie: http://t.co/HaDbgRqxvC #wclw #writing