Writers and Taxes

For those of us in the US (and the expats around the world) tax time has just come to a close. Some of us celebrated book sales and article placements by having to pay taxes on our earnings. But even if you didn't make any money writing last year, you might still be able to write off your expenses as a writer.

Here are some things to keep in mind for NEXT year.

• If you buy a new computer this year, you may be able to write it off on your taxes. If you make a lot, you can write the whole amount off or you can spread the cost over 3-5 years (depending on state). This also goes for eReaders like the Kindle, Nook, iPad, Kobo, or Sony Reader. If you read books on it, or can write with it, chances are that it can be counted as a necessary expense and you can write it off.

• If you host contests on your blog, you can write off things like packaging, postage, and even the prizes themselves. So if you give away a book, you can write off the book, the box you ship it in, the postage to send it, even the tape you use to hold the box together. 

• If you're actively pursuing a writing career, you can write off the cost of your website, URL's, email hosting, etc. Blogger's URL service is only $10, but that $10 will add up over time. You might even be able to write off the cost of your internet service if you actively use it for networking, promotion, etc. 

• Going to conferences and book fairs can also be written off. That includes gas, parking, public transport, lodging, meals, and the cost of attendance. Yearly membership fees (like those to SCBWI, etc) can also be taken. You can't deduct the cost of nice clothes or shoes (writers don't technically have a uniform) but you can deduct the costs for dry cleaning.

• If you've got a local writers group, the costs of travel can be deducted, so keep a record of when and how far you drive.

• Late fees for library books can be written off as well. I don't think you can write off the renting of DVD's, but book sales, book replacement fees, etc, can be taken off. This also includes the costs of using the internet at the library.

• If you've got a home office, you can write that off too, everything from decor and office supplies to heating and cooling costs for that percentage of your home/percentage of your rent. Rules vary, but usually if it's used solely for writing/reading (ie, research) and has a door that closes, you can write it off. There's some rumor that if you write off a large amount for a home office you'll get audited, but it's hit or miss. Most of the stuff in my home office I already had so there wasn't much to write off. Be careful with record keeping and be honest and you shouldn't worry about being audited.

• Books. Yeah, you can write off the cost of books. It can be considered 'research' and 'keeping up with the industry' and that's totally awesome. Also, subscriptions to writing or literature/review magazines count too. How-to writing books and market guides are also game.

• You can write off the costs of hiring a freelance editor (like me!) or if you're self publishing, all that design work, cover art creation, the costs of getting an ISBN, printing costs, all of that can be written off. Books given away to reviewers can also be deducted at full retail value.

• Promotional materials like business cards, bookmarks, posters, postcards, gift baskets, and other tchotchke's you may give away can all be written off. The costs of signings, author appearances, or other speaking engagements (and Skype fees) can be taken too.

• Making copies, a printer, paper, ink, all of that can be written off too. The costs of sending paper queries can also be deducted, including the return postage for SASEs.

• If you make long-distant calls to your agent or editor, those calls can be deducted. 

• If you pay a babysitter to watch the kids while you work, you can write that off. This could also including housekeeping fees depending on your local rules.

• If you take a family vacation, visit museums, local writers groups, libraries, local media/celebs/writers/agent/editors, and collect business cards as proof that it was a "working" vacation and you can write it off.

• And here's the kicker, you can even write off the cost of getting your taxes done. Tax lawyers, accountants, and other professional services are writeoffable.

It all varies state-to-state and you should consult a certified CPA to be clear about the rules for your area. Tax laws change from year to year so pick someone that is active in the field. If anything, H&R block do a free chat and you can make a free appointment with a tax consultant to figure out the answers to your questions.

If it falls under "Necessary Business Expenses" it's deductible! Claiming you bought a private plane to learn how to skydive so that you can write about skydiving won't cut it, but if you took a lesson or two or did a jump while on vacation, you should be able to write off that.

It's never too early or too late to get organized for tax season. Visit the IRS website @ www.irs.gov or call them toll free at: 800-829-3676 and request publications such as # 334 (Tax Guide for Small Businesses and Individuals who use Schedule C or C-EZ), #535 (Business Expense –this guide tells you what you can and CANNOT deduct), and #552 (Record keeping for Individuals).

So save those receipts and have a happy writing year!

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C.A. Marshall is a freelance editor, lit agent intern, YA writer, and loves to play with her dog Mollie. She dreams of one day owning a small house near the water, preferably in England, with a shelf full of books she has written and has helped others to write. She is currently single. And unagented. She can be found in Emmett, MI, at camarshall.com for writing, editorcassandra.com for editing, and on twitter @CA_Marshall.