Living on $500,000 a Year

William Quirk, in American Scholar, takes a look at F. Scott Fitzgerald's tax returns to reveal what it says about the famed author's life and the times he lived in.

From the piece...

What can be learned from Fitzgerald’s tax returns? To start with, his popular reputation as a careless spendthrift is untrue. Fitzgerald was always trying to follow conservative financial principles. Until 1937 he kept a ledger—as if he were a grocer—a meticulous record of his earnings from each short story, play, and novel he sold. The 1929 ledger recorded items as small as royalties of $5.10 from the American edition of The Great Gatsby and $0.34 from the English edition. No one could call Fitzgerald frugal, but he was always trying to save money—at least until his wife Zelda’s illness, starting in 1929, put any idea of saving out of the question. The ordinary person saves to protect against some distant rainy day. Fitzgerald had no interest in that. To him saving meant freedom to work on his novels without interruptions caused by the economic necessity of writing short stories. The short stories were his main source of revenue.

Until the Hollywood years (1937–40), Fitz­gerald handwrote his income tax returns. During the Hollywood years, the returns were prepared by accountants and typed. He, of course, kept his ledgers by hand. Regardless of how they were transcribed, the returns and the ledgers reveal a great deal about Fitzgerald—how he lived and how he struggled.

The ledger for 1919 shows earnings from short-story sales of $879, an amount below that required for a tax return. But the next year Fitzgerald was suddenly rich. In 1920 he earned $17,055 and paid $1,444 in taxes—an overall effective tax rate of about 8 percent. Fitzgerald sold 11 short stories to magazines for $3,975 and four short stories to the movies for $7,425; he received $6,200 in royalties from This Side of Paradise. The novel, published in April 1920, went through printing after printing, totaling 49,075 copies—more than any of his other novels during his lifetime. His royalties between 1920 and 1923 came to $13,036, which, again, was more than the royalties from any of his other novels.

The publication of This Side of Paradise when he was 23 immediately put Fitzgerald’s income in the top 2 percent of American taxpayers. Thereafter, for most of his working life, he earned about $24,000 a year, which put him in the top 1 percent of those filing returns.